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by Indiana Farm Bureau Insurance

Does car insurance cover rental cars?

Young woman at a car repair shop getting her keys from the maintenance man

Indiana Farm Bureau Insurance’s Personal Auto Policy contains something called Transportation Expenses Coverage, which is commonly known as rental car coverage, on the base policy. 


As the policyholder, you must have Other Than Collision and Collision coverages for the Transportation Expenses Coverage to apply. Transportation Expenses coverage is included at $30/day for a maximin of 30 days. Higher limits of $40/day and $50/day for 30 days are available for purchase. 


Why does any of this matter? It matters because in the event you get into a car accident and are unable to drive your vehicle, it’s important to know if your car insurance covers rental cars. This not only can save you money, but also saves you the frustration of trying to find out if you have coverage when your vehicle is already undriveable. 


Does personal car insurance cover rental cars? 


In many cases, a personal auto policy transfers to the rental car for liability coverage and comprehensive coverage for the actual rental itself. 


Here are the two most common examples. First, an insured has an accident in their automobile and the auto must be repaired; the coverage that is on the vehicle being repaired will transfer over to the rental if the named insured or a family member residing in their household operates the rental and their name is added by the rental car company when you rent the vehicle.   


Second, the same coverage would apply if an insured goes on vacation to anywhere in the U.S. and rents a vehicle. The coverage on their auto policy would transfer over to the rental, if a named insured or family member residing in their home operates the rental and their name is added by the rental car company when you rent the vehicle. 


What is rental car insurance? 


Rental car insurance can be purchased from a rental agency when renting a car and can be purchased for first party coverage (damage to the rental car itself) or third party (liability coverage) or both. In many cases, an insured doesn’t need to purchase the rental car insurance offered by the rental car agency as, dependent upon the coverage an insured has on their car insurance policy and their reason for renting, the coverage from their Indiana Farm Bureau Insurance auto policy could transfer over to the rental car.    


Typical rental insurance coverage  


Rental insurance coverage purchased from a rental company can differ from agency to agency, but in many cases is sold as first party and/or third-party coverage.    


If you have an auto policy with us, know that Indiana Farm Bureau Insurance’s personal auto policy can provide rental coverage when renting a vehicle. 


Benefits of having rental car insurance  


The main benefit of Transportation Expenses Coverage on your auto policy is the peace of mind knowing that in the event of a covered loss, your policy will cover alternate transportation within the limits of coverage. A benefit of purchasing the insurance from the rental car agency itself is not having a claim on your personal auto policy if a loss occurs while operating the rental.   


Check your coverage before renting a car 


Before you rent a vehicle, contact your local insurance agent to find out what is covered on your auto insurance policy. Learning about your coverage now can help save time and money later if you do need to rent a car in the future.  



Does car insurance cover rental reimbursement coverage?  


At Indiana Farm Bureau Insurance, the personal auto insurance policy has a base coverage limit of $30/day for 30 days for a rental car if the policy has Other Than Collision and Collision coverages.   

Commonly asked questions: 


Here are a few commonly asked questions when it comes to auto insurance and rental cars. If you don’t see your questions below, visit the FAQ page or contact an agent today to get your question answered.  


  1. Rental Car Insurance Vs. Rental Car Reimbursement 


While these two terms are used interchangeably, they usually mean the same thing. In most cases, when an insured gets a rental following a covered loss, we pay the rental charges directly to the rental company. The insured typically pays a deposit that the rental company charges them initially, but it is reimbursed once the vehicle is returned undamaged.   


  1. Can I rent a car without owning car insurance? 


A person can rent a car without having car insurance; however, they’d need to purchase the insurance coverage offered by the rental agency to be protected.  


  1. When does car insurance not cover rental car expenses?  


The insured needs base coverage on their personal auto insurance policy. While some exclusions do apply to the rental car, these are similar to the exclusions on your personal auto insurance policy. 


An example is a client that only carries liability coverage on their auto policy. Liability coverage in many cases transfers over, but if the client doesn’t carry Collision and/or Other than Collision Coverage, they would not have those coverages to carry over to the rental vehicle, nor would Transportation Expenses Coverage apply.  


Another example is if an insured hits a deer and does not carry Other than Collision Coverage. They would not be eligible for Transportation Expenses Coverage for this loss.  


  1. What happens if I go over the 30-day limit on my car rental?   


With supply chain issues, body shop staff shortages and vehicles taking longer to repair due to technology on them, it’s possible for you to run out of days during the 30-day limit on your rental car. Indiana Farm Bureau Insurance and most auto insurance companies don’t offer more days once you are past your 30-day rental period. So, what should you do if this happens to you, or is there a way I can prevent running out of days before I pick up my rental?  


  • Wait to pick up your rental car until after you drop your car off at the body shop to ensure you have maximum days with the rental  

  • If you live nearby family or friends, ask around to see if you can borrow a car or carpool while you are waiting for your car in the body shop  

  • Assess your driving needs and only get a rental for the most critical times  

  • Work with your body shop to make sure all the parts are in before dropping off your car 


We know these suggestions might not be possible for everyone, but they could help. 


What if I’m charged a “loss of use” fee by a rental company?  

You know that an Indiana Farm Bureau Insurance automobile policy could cover damage to a rental car, but lately rental car companies are charging a “loss of use” fee incurred if they are unable to rent the vehicle because it is damaged. Even
though the actual damage may be covered, they may charge you the cost of the rental car for each day it is unrentable.  

Loss of use coverage for a rental car is not standard in many policies, but the VALET program with Indiana Farm Bureau Insurance does provide coverage for this on our personal automobile policies.  

Rest assured, when the unexpected happens, we’re there for you.