Rental reimbursement (called 'loss of use' or 'courtesy car' cover in the UK) pays for a hire vehicle while your car is being repaired after a covered claim. US policies typically pay $30–$50 per day up to a total of $900–$1,500. Rental rates in 2025–2026 average $50–$120/day in the US, so the daily cap matters — a modest cover level may not cover the full rental cost. The coverage adds roughly $5–$15/month to your premium.
Rental reimbursement: typical terms
| Policy element | Typical range (US) | What to watch |
|---|---|---|
| Daily limit | $30–$50/day | Average rental is $50–$120/day; gap is your cost |
| Total limit | $900–$1,500 per claim | Long repairs can exhaust the cap quickly |
| Waiting period | Often day 1 of covered repair | Confirm whether it starts from claim date or repair start |
| Deductible | None on rental cover itself | But the underlying claim may have a deductible |
| UK courtesy car | Often via the repairer | May be limited to a basic small car; check policy grade |
| Cost to add | ~$5–$15/month | Worth checking especially if you have only one vehicle |
What rental reimbursement covers
When your car is in the shop following a covered claim — a collision repair, a stolen vehicle being searched for, a fire or flood claim — rental reimbursement cover pays back the cost of a hire vehicle while you wait. It does not cover rentals for personal travel or vehicle servicing. It applies only when the need for a rental stems directly from a covered claim.
Coverage typically continues until whichever comes first: the repair is complete, the total cap is exhausted, or the insurer declares a total loss and pays you out (at that point you no longer need a repair rental).
The gap between policy limits and real rental costs
This is where most people are caught out. A $30/day limit sounds reasonable until you actually try to rent a car. In 2025–2026, average daily rental rates in the US ranged from $45 for a basic compact to $90–$120 for a mid-size or SUV equivalent to your own vehicle. A $30/day policy cap means you pay $15–$90 per day out of pocket.
The practical approach: choose a daily limit of $50 or higher. The premium difference between $30/day and $50/day cover is usually just $2–$4/month. It is worth it.
Not-at-fault accidents: a different path
If the accident was the other driver's fault, their liability coverage should provide your rental — you should not need to use your own rental reimbursement cover at all. The at-fault driver's insurer is responsible for your loss of use from the date of the accident. However:
- Establishing fault takes time; you may need to use your own cover initially and get reimbursed later
- The at-fault insurer may dispute the rental duration or vehicle grade
- If liability is split, you may receive partial reimbursement from each side
UK: courtesy cars and credit hire
In the UK, the concept works differently. Many comprehensive policies include a courtesy car — a basic replacement (usually a small hatchback) provided by the approved repairer for the duration of the repair. This has no daily rate to worry about but may not match your normal vehicle.
For not-at-fault accidents, the UK also has a credit hire system: specialist credit hire companies provide a like-for-like vehicle at no upfront cost to the victim and then recover the cost from the at-fault insurer. Credit hire rates are high and are a significant driver of third-party claim costs in the UK.
When rental reimbursement is particularly valuable
- You have only one vehicle and cannot be without transport for work or childcare
- You live in an area with poor public transport
- Your vehicle is in a high-theft area — stolen vehicle searches take longer, meaning more rental days
- Your car requires specialist parts that extend repair time
- You drive a less-common vehicle where equivalent repairs take longer
What rental reimbursement does not cover
- Repairs not arising from a covered claim (e.g., mechanical breakdown)
- Rental during a lapse in coverage
- Upgrades above the policy limit
- Fuel costs for the rental vehicle
- Insurance you purchase for the rental vehicle (though some credit card travel cover helps here)
- Rentals while your vehicle is being serviced
Frequently asked questions
Is rental reimbursement worth adding?
Does rental reimbursement kick in immediately after an accident?
What happens to the rental if my car is declared a total loss?
Can I choose any rental car?
Does my credit card cover rental car costs while my car is being repaired?
Sources & further reading
- Insurance Information Institute — Optional Car Insurance Coverages
- Bankrate — Average Car Rental Costs
Figures, prices and policy details were current at the last-updated date above. Automotive pricing, incentives and regulations change frequently — verify time-sensitive details with the linked primary sources. Read our editorial policy and fact-checking standards.
