Rental Car Benefits

When you purchase automobile insurance you have the opportunity to purchase 1st party coverages. A 1st party coverage is a benefit enjoyed by the policy holder in the event of an accident. Rental Car Benefits are a first party coverage, and one that I highly recommend.

The way it works is that when you are in an accident you will be provided with a rental car during the repairs to your vehicle. Now, if you have 8 cars in you household and only 3 drivers, rental car benefits may be a waste of money. However, if you have only one car and you need it for transportation to work in order to support your family, rental car benefits may be very important. Renting a car is not cheep (at least $20/day for a cheap compact car), and it takes a long time to repair a vehicle (1-2 weeks for fender benders). So if you are in a moderate accident and are looking at 3 weeks of repair time (assuming the shop doesn't have to order parts), and you are paying $20/day plus tax for a rental car, you are looking at upwards of $400 in rental car expense out of your own pocket. Compare that to about $5/month per vehicle for rental car benefits on your auto policy.

Real Life Example:

I recently received a claim where my insured driver pulled from a parking garage and was struck by an oncoming car. My insured argued that the other party should have used more caution when approaching a parking garage with an obstructed view. I strategically advised my insured that he should have heeded the same advice when exiting a parking garage with an obstructed view. Long story short, he is at fault for violating the other driver's right of way. Luckily he has collision coverage, but sadly no rental car benefits. His car will be in the shop for 5 weeks, and he has no other mode of transportation or the money needed to rent a car. I was tempted to send the following letter:

Dear Valued Customer,

I am not pleased to inform you that you do not have rental car benefits on your policy. Sucks to be you! But look on the bright side, now you can learn the ins and outs of the public transportation system in your community, and you are sure to meet lots of new and interesting people. Enclosed for your convenience you will find the bus schedule for your area, and a coupon for a discount on a bus pass. Happy Trails!

Love,
Your Adjuster