Rental Coverage on Your Auto Policy
A great option for many people to add to their insurance is rental coverage.
This coverage will allow you to rent a vehicle while yours is in the shop for repairs.
Many people don’t realize this, but if the accident is your fault, your insurance company will pay for the car to be repaired, but only if you have rental coverage.
If not, then the expense will come out of your pocket. Depending on the length of the repair that could cost you a few hundred bucks or more.
One of the things I ask all my clients about when we are reviewing their auto policy is if they have access to a third vehicle.
The reason is most families use two vehicles everyday just to survive the daily grind. There’s work to go to, kids to drop off at school, errands to run.
Two vehicles is pretty much a necessity here in North Texas where we’ll drive 30 minutes to go to a gas station! Some people have three cars in their family, or relatives living close from who they could borrow a car.
But if you use both your cars every day, and you don’t have access to a third car, you should definitely look into rental coverage. It could save your marriage and your sanity!
The coverage works like this: you’re given a choice of different groups of two.
Usually there are 3-5 different levels to choose from. They stand for different dollar amounts such as $35/$1050.
The first number is how much the insurance will cover per day for rental, the second is the total amount per incident.
So in the example I gave you, it was $35 a day for up to $1,050, which calculates to 30 days of coverage.
Depending on your insurance company, the coverage could work as a reimbursement. So you might have to upfront the payment for the rental and turn in your receipt to be reimbursed.
Most of the time if it’s a straight rental coverage endorsement, you’re only eligible for reimbursement if you rented a car.
Some insurance companies carry other types of reimbursements that you can use for rental expenses or other extra expenses.
This gives you a little more flexibility in how you use the money. The amounts are usually slightly different such as $50/$1000 instead of $35/$1050.
Let me give you an example of how this coverage could benefit you. Let’s say your rental costs you $23 a day for 20 days or $460 dollars.
If you carry this reimbursement coverage, you could be eligible for the full $1000 in reimbursement even though the rental only cost you $460.
A lot of our customers love the flexibility of this endorsement, and sometimes it actually costs less per month in premium increase compared to the rental reimbursement!
One important thing to note in both instances is that you have to carry either collision, or collision and comprehensive to qualify for either type of rental reimbursement coverage.
Different companies have different requirements, but collision is the bare minimum you’ll need to carry.
Towing or Roadise Assistance Coverage
Towing or roadside assistance coverage is also a great option to save money.
It’s a wonderful option to the monthly roadside and towing memberships that can run $120 a year or more, and it usually costs just a few cents per day to add towing and roadside.
A pretty typical price range in our agency is $3-$5 dollars per vehicle for a six-month policy term.
That equates to $.02-$.03 a day for towing and roadside coverage! Here’s how the coverage works: should you break down on the side of the road, you call, and they’ll send out a tow truck.
It works for flat tires, no gas, broken belts— anything that can be fixed on the side of the road, they’ll fix it and get you on your merry way.
If they can’t fix it, they will tow you to the nearest shop of your choice for repairs. Typically there is a dollar limit or mileage limit on how far they will tow you.
Your options will be like $80/$120 if it’s a dollar amount or 35/45 miles if it’s a mileage limit.
A lot of times this coverage works as a reimbursement as well. So you’ll have to pay upfront and then submit the receipt for reimbursed for the expense.
Some people have asked, “What if I break down in Kansas? Can I be towed back to DFW?” Absolutely you can.
The insurance company should still cover the tow up to the limits of the endorsement whether its dollars or miles.
Just be prepared to pay the difference between your coverage limits and the cost of the tow if you want to be towed from the great state of Kansas!
