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Car Accident in a Rental Car

Written by Michele Wilmonen. Posted in Ask An Insurance Question Last Updated: 09/03/2018

Q: I was in a car accident with a rental car and was told my personal car insurance policy would cover a car accident in a rental car. I got a bill from the rental car agency and when I called and asked them what it was for I was told it was for time out of service, which my car insurance company did not pay for.  What is this and why didn’t my car insurance company cover it?

A: Time out of service is the time period the rental car cannot be rented out because it is damaged or being repaired. Car rental agencies lose money when they can’t rent out one of their cars, so they pass the amount of their loss to you. For each day the car cannot be rented, they charge you the rate they would have received.

For example, if a car rents for $20 a day and it takes 10 days to be repaired, they will send you a bill for $200.

Unfortunately, there is no coverage for this time out of service and only the cost of repairs are covered by your insurance if you have a car accident in a rental car.

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Michele Wilmonen

Michele's first introduction to insurance was working for a major insurance company as a file clerk and a mailroom supervisor in a regional office. She learned insurance directly from underwriters and claims adjusters from questions and also watching them do their job. Since then, she's earned a number of insurance certifications from the Insurance Institute of America and also a Bachelor’s degree from the University of Idaho. She blogs at Car Insurance Guidebook.

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