Leslie Kasperowicz holds a BA in Social Sciences from the University of Winnipeg. She spent several years as a Farmers Insurance CSR, gaining a solid understanding of insurance products including home, life, auto, and commercial and working directly with insurance customers to understand their needs. She has since used that knowledge in her more than ten years as a writer, largely in the insuranc...

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Melanie Musson is the fourth generation in her family to work in the insurance industry. She grew up with insurance talk as part of her everyday conversation and has studied to gain an in-depth knowledge of state-specific insurance laws and dynamics as well as a broad understanding of how insurance fits into every person’s life, from budgets to coverage levels. Through her years working in th...

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Reviewed by Melanie Musson
Published Insurance Expert Melanie Musson

UPDATED: Mar 16, 2022

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Just What's Essential

  • If your car is damaged, rental reimbursement coverage may pay for a rental car
  • Car insurance doesn’t pay for rental cars if your vehicle breaks down
  • Many car insurance companies require full coverage in order to add rental car reimbursement

Being without a car is a hassle, but your car insurance may not cover a rental. It all depends on why your vehicle is in the shop and what car insurance coverages you have in place.

If my car breaks down, will insurance cover a rental? Unfortunately, your car insurance coverages won’t kick in if your car breaks down. However, they will help if you’ve been in an accident or your vehicle has been damaged.

Rental car reimbursement coverage pays for a rental car if yours is in the shop for a covered claim. But, you will most likely have to carry full coverage to add reimbursement coverage.

Since rates and coverages vary widely by company, shop around to find exactly what you need. Then, compare multiple companies for the best coverage with the lowest rates available for you.

Keep reading to learn more about when your car insurance will cover a rental car and how to save on full coverage insurance.

Does car insurance cover rental cars?

Does my insurance cover rental cars if my car breaks down? Unfortunately, car insurance doesn’t cover repairs or a rental car while your vehicle is in the shop due to a breakdown. However, car insurance may pay for a rental car if your vehicle is damaged and you have the proper coverages.

If another driver caused the accident, their car insurance should provide a rental car while yours is repaired. On the other hand, if you cause the accident, collision coverage and rental car reimbursement coverages need to be in place.

Comprehensive coverage kicks in if your car is damaged from something other than an accident. But, again, you also need rental reimbursement coverage to pay for a vehicle to use.

Keep in mind rental car reimbursement coverage will have a limit. For example, you may be allowed to rent a car for $50 a day for 30 days. In most cases, you will pay for the rental, and then the car insurance company will pay you back.

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How much is rental car reimbursement?

Rental reimbursement coverage is fairly inexpensive. However, most car insurance companies require you to carry full coverage insurance to add rental reimbursement.

Full coverage combines liability, collision, and comprehensive coverages. Most states require drivers to carry liability coverage but don’t require many other coverages.

Liability covers property damage and bodily injury to others if you cause an accident. However, this type of coverage offers no protection for you or your vehicle.

Collision covers damages to your vehicle from an accident. Whether you hit another car or a tree, collision kicks in.

On the other hand, comprehensive insurance covers damages unrelated to an accident. Coverage includes theft, vandalism, fire, falling debris, and acts of nature, such as floods, hail, or tornados.

Full coverage car insurance is more expensive than liability coverage because it offers more protection. However, it might surprise you how little more coverage costs.

This table shows average rates based on coverage type from top car insurance companies.

Average Annual Car Insurance Rates by Driving History
CompanyAverage Annual Rates with Clean RecordAverage Annual Rates with 1 AccidentAverage Annual Rates with 1 DUIAverage Annual Rates with 1 Speeding Violation
Allstate$3,819.90$4,987.68$6,260.73$4,483.51
American Family$2,693.61$3,722.75$4,330.24$3,025.74
Farmers$3,460.60$4,518.73$4,718.75$4,079.01
GEICO$2,145.96$3,192.77$4,875.87$2,645.43
Liberty Mutual$4,774.30$6,204.78$7,613.48$5,701.26
Nationwide$2,746.18$3,396.95$4,543.20$3,113.68
Progressive$3,393.09$4,777.04$3,969.65$4,002.28
State Farm$2,821.18$3,396.01$3,636.80$3,186.01
Travelers$3,447.69$4,289.74$5,741.40$4,260.80
USAA$1,933.68$2,516.24$3,506.03$2,193.25
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While most states require liability-only car insurance, it’s the cheapest option because it offers the least coverage.

How much more is full coverage than liability?

Although full coverage is around $30 a month more, it keeps you from high out-of-pocket costs. Remember, liability-only coverage doesn’t pay for any damages to your vehicle.

When does car insurance not cover rental cars?

As we’ve already discussed, car insurance won’t always pay for a rental car. Rental reimbursement coverage only works for repairs from a covered claim.

Car insurance won’t cover a rental car if:

  • Your car breaks down. Car insurance won’t pay for a rental if your vehicle is in the shop for a mechanical failure or routine maintenance.
  • You go on vacation. If you want to rent a car for a trip, your car insurance won’t cover it, and you’ll have to pay for it yourself.
  • You don’t have rental reimbursement coverage. If you are at fault in an accident or your car is otherwise damaged, the rental coverage must already be in place for your car insurance to pay for a vehicle.

Add rental reimbursement coverage if you think you would have to rent a car if yours is in the shop. It’s not very expensive and saves you from paying for a rental yourself.

However, if you have more than one vehicle or can borrow a car, you can skip the coverage.

How can you save on full coverage car insurance?

Because full coverage car insurance is expensive, take advantage of easy ways to lower your rates.

Car insurance discounts significantly lower insurance rates. In addition to low-mileage discounts and usage-based discounts, most car insurance companies offer various ways to save. Drivers can take advantage of discounts ranging from multi-policy discounts to discounts based on your car’s safety features.

This table shows car insurance discounts from top companies. The savings amount is listed if it is available.

Car Insurance Discounts
Car Insurance DiscountsAllstate (%)American Family (%)Farmers (%)GEICO (%)Liberty Mutual (%)Nationwide (%)Progressive (%)State Farm (%)Travelers (%)USAA (%)
Adaptive Cruise ControlN/AN/AN/AN/A5xxN/AN/AN/A
Adaptive HeadlightsN/AN/AxN/A5xxN/AN/AN/A
Anti-lock Brakesxxx555x5xx
Anti-Theftxxx252025x15xx
Claim Freexxx26x10x152312
Continuous CoveragexxxxN/AN/AxN/A15N/A
Daytime Running Lightsxxx155xN/Axx
Defensive Driverxxxx105105103
Distant StudentxxxxN/A10xx7x
Driver's Edxxxx10N/A101583
Driving Device/AppxxN/Ax30402050305
Early SigningxxxxN/A8xN/A1012
Electronic Stability ControlxxxN/A5xxN/AN/AN/A
Emergency DeploymentN/AN/AN/A25N/AN/AN/AN/AN/AN/A
Engaged CoupleN/AN/AN/AN/AN/AN/AN/AN/AN/AN/A
Family LegacyN/AxN/AxN/AN/AxN/AN/A10
Family PlanN/AxxN/AN/A25N/AN/AN/AN/A
Farm VehiclexN/AxxN/AN/AN/AN/AN/AN/A
Fast 5N/AN/AN/AN/AN/AN/AN/AN/AN/AN/A
Federal EmployeeN/AN/Ax810N/AN/AN/AN/AN/A
Forward Collision WarningN/AN/AN/AN/A5xxN/AN/AN/A
Full PaymentN/Axxx$5N/AxN/A7.5N/A
Further EducationN/AN/AN/Ax1015N/AN/AxN/A
Garaging/StoringN/AN/AxN/AN/AN/AN/AN/Ax90
Good CreditxxN/AN/AN/AxxxN/AN/A
Good Studentxxx1522.510x2583
Green VehiclexN/A5N/A10N/AN/AN/A10N/A
HomeownerN/AN/Axxx5x35N/A
Lane Departure WarningN/AN/AN/AN/AxxxN/AN/AN/A
Life InsurancexN/AN/AN/AN/AxN/AN/AN/AN/A
Low Mileagexxxxxxx30xx
LoyaltyN/AxN/AxN/A5xN/AN/Ax
MarriedN/AN/AN/AN/AxxxxN/Ax
Membership/GroupN/AN/AN/Ax107N/AN/AxN/A
MilitaryxN/Ax154N/AN/AxN/Ax
Military GaragingN/AN/AN/AN/AN/AN/AN/AN/AN/A15
Multiple DriversN/AN/AN/AN/AN/AN/AN/AN/AN/AN/A
Multiple Policies1029x102010121713x
Multiple Vehiclesxxx25102010208x
New AddressN/AN/AN/AN/A5N/AN/AN/AN/AN/A
New Customer/New PlanN/AN/AN/AN/AxN/AN/AN/AN/AN/A
New GraduateN/AN/AN/AN/A5N/AN/AN/AN/AN/A
Newer VehiclexN/AxxN/Axx401012
Newly LicensedN/AN/AN/AN/A5N/AN/AN/AN/AN/A
NewlywedsN/AN/AN/AN/A5N/AN/AN/AN/AN/A
Non-Smoker/Non-DrinkerN/AN/AN/AN/AN/AN/AN/AN/AN/AN/A
Occasional OperatorN/AN/AN/AN/AN/AN/AN/AN/AN/Ax
OccupationxN/Axx1015N/AN/AxN/A
On-Time PaymentsxN/AN/AN/AN/AN/AN/AN/A15N/A
Online ShopperN/AN/AN/AN/AN/AN/A7N/AN/AN/A
Paperless DocumentsxxxN/AN/A5$50N/AN/AN/A
Paperless/Auto BillingxxxN/Ax$30x$233
Passive Restraintxxx40x20x40xx
Recent RetireesN/AN/AN/AN/A4N/AN/AN/AN/AN/A
RenterN/AN/AN/AN/AN/AN/AN/AN/AN/AN/A
Roadside AssistanceN/AN/AN/AN/AN/AN/AN/AN/AN/AN/A
Safe DriverN/AN/Ax15N/A3531152312
Seat Belt UseN/AN/AN/A15N/AN/AN/AN/AN/AN/A
Senior DriverxN/AxN/AN/AN/AN/AN/AN/Ax
Stable ResidenceN/AN/AN/AN/AN/AxxN/AN/AN/A
Students & AlumniN/AxN/Ax107N/AN/AN/AN/A
Switching ProviderN/AxxN/A10N/AxN/AN/AN/A
Utility VehiclexN/AxxN/AN/AN/AN/AN/AN/A
Vehicle Recoveryxxx153525x5xx
VIN EtchingN/AN/AxN/A5xxN/Axx
VolunteerN/AxN/AN/AN/AN/AN/AN/AN/AN/A
Young DriverN/AN/AN/AN/AxN/AxN/AN/A$75
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Most drivers are eligible for more than one discount, so bundle them for the most savings.

In addition, consider raising your deductibles. Although out-of-pocket costs are higher, rates are lower.

Also, comparison shop to find the coverage you need at the lowest rate possible. For example, most companies offer rental reimbursement coverage, so compare multiple companies to find your best deal.

Enter your ZIP code below to view companies that have cheap auto insurance rates.

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If My Car Breaks Down, Will Insurance Cover A Rental: The Bottom Line

Your car insurance won’t cover a rental car if your car breaks down. However, a rental car is covered if your vehicle is being repaired for a covered claim and you have the proper coverages.

In addition to rental reimbursement coverage, full-coverage insurance may be required. Although full coverage is more expensive, it also offers much more protection.

Drivers can save money on full-coverage car insurance by taking advantage of discounts and raising deductibles.

Remember that every company offers different rates and coverages. So shop around to find full coverage and rental reimbursement coverage with the lowest rates for you.