The other day I received a phone call at our office in Bellbrook, Ohio. It was one of our policy holders wanting to know if he had coverage for a rental car. His truck was having mechanical problems and had to go in the repair shop for an extended time. He needed a vehicle to drive until his truck was repaired.
After looking up his policy, I told him that the good news was he did have rental reimbursement on his auto policy, but the bad news was that he had to have an auto insurance claim for it to apply. In this case, he was able to have a rental car provided through an extended warranty plan he had purchased on his truck. But it reminded me of how often this question comes up, “What if I need a rental car?”
If you are in an auto accident or your vehicle is damaged by some external force such as wind, hail, fire, etc…do you have coverage for a rental car while your car is in the body shop for repairs? Some people think that this is automatically included on every auto policy, but it is not. You have to include this coverage on your policy in advance in order to have it when you need it.
All rental coverage is not the same. Some auto insurance policies provide only a small amount that is paid directly to the rental car company while your car is being repaired. With our Farmers unique Loss of Use coverage, you are paid a specific amount per day for the “loss of use” of your vehicle while it is in the body shop due to a covered claim. You can choose the amount you will receive per day when you include this coverage on your Farmers auto insurance policy.
The most common amounts for our Loss of Use K-coverage are $25.00 per day and $50.00 per day. Your auto insurance premium will reflect the level of coverage you select. When your vehicle is in the body shop due to a claim, you will receive the specific amount per day promised in your policy. This can be paid directly to the rental car company on your behalf, or it can be paid directly to you. This can work to your advantage. If you are able to rent a car for less than the amount of your coverage, the difference belongs to you as a compensation for not having the use of your car.
What if you have the coverage, but decide not to rent a car? If you have Farmers Loss of Use K-coverage and you don’t rent a car while your vehicle is in the body shop due to a claim, you will receive the full amount of your coverage per day paid directly to you! For example, if you had the $50.00 per day coverage and your car was in the body shop for 10 days, you would receive a “loss of use” reimbursement of $500.00. In many cases, this would actually cover the cost of the deductible on your claim.
Call the Greg Davis Agency today at 937-848-6840 to make sure you have this important coverage when you need it!