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- First Party Coverage
- No Fault based
- No Deductible Applies
- Limits on amount of coverage
When you get in an accident, you will need a rental car while your vehicle is getting fixed. That is the reason why you need this coverage. This is not included under either the Collision or Comprehensive coverages of the policy.
You must therefore get his Rental Coverage and pay extra premium if you want an extra vehicle when an accident occurs. Note that you will be entitled to this rental car regardless of who is at fault.
Rental Coverage or Loss of Use is quite controversial. Usually you have several limits that you purchase when you get your policy. They start very low.
It will not be surprising to see people with $20 dollars a day for a rental car. If you have not look how much a rental car will cost you, you probably should.
Most national rental companies start their cheapest (the rice cooker, geo metro, no offence intended) at $25 per day. When you add tax and mileage (if there are any charges on that), you will be over that amount very quickly.
Depending on the insurance company, your rental coverage limits will be either:
« Maximum daily amount for a set amount of days. $25 dollars a day for 30 days. Note that this includes weekends.
Insurance policies have more limitations than the ones outlined above. Mileage and gas are not covered. This means that your adjuster will deduct the mileage or gas charges from the bill, even if you are within the allowed limits.
In addition, the Rental Coverage will have limitations on when you can start your rental. Most policies start the rental immediately only if the car is not driveable.
This is always a point where insurance companies will try to save some money. Some of the things that they will call ˇ§driveableˇ¨ are very questionable. Often times the damages are to the headlights, turn signals, rear view mirrors, glass damage, or doors that are stuck and will not open. The insurance company will tell you that if your car is driveable, they will not put you in a rental until you get to a body shop. Again, this is very arguable and I would argue back.
I think the best way to be reasonable regarding this issue is ˇ§if the damage affects the normal operation of the vehicle, then it is NOT driveable.ˇ¨ In other words, if the horn necessary for the normal operation of the car? Yes, then if the horn does not work then the car is not driveable. Same with headlights, locks, rear view mirrors etc. If the door does not open, how can you get in to operate the vehicle?
The door is necessary for the NORMAL operation of the vehicle; therefore, it should be enough to fit the category of non-driveable. I can see the argument if the damage is to the back passenger door, or even the trunk. It is hard to believe, but insurance company will fight you for $1.
I have seen insurance companies arguing the denial of rental coverage because the client drives the car in the day light; and there is only damage to front headlights!!!!! Ludicrous.