Will my auto insurance pay for a rental car if my car breaks down?

By Jacques Wong | Last updated: September 10, 2017

Well, the quick and simple answer to this question is "not usually." The full answer really depends on the circumstances. Why your vehicle broke down can make all the difference.

To explore this question in more details, we'll have to start by talking about one of the basic principles of insurance. Generally speaking, insurance exists only to provide risk transfer for accidents. In other words, things that that happen suddenly and unexpectedly. There is a common misconception that insurance will pay for things whenever they break, but that is simply not the case – that is what warranties are for. Insurance is not meant for maintenance-related issues.

So, that being said, there is something called loss of use coverage for your vehicle. It will include reimbursements if the insured requires a rental car as the result of damage to their vehicle. Whether this kicks in or not depends on whether your loss is covered by insurance. And this is where things get tricky. If your car breaks down because of an insured loss like vandalism or a rock flying into your radiator, then your insurer will cover the cost of arranging alternate transportation. But if it breaks down for no discernible reason, or simply due to age or maintenance issues, then there will be no coverage from your insurance company (learn The First Steps You Need to Take After Wrecking Your Car).

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Written by Jacques Wong

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Jacques grew up around the insurance industry and began actively participating in 2013. Since then, he has gotten a Level 2 license, won Insurance Council of BC awards in 2015 and 2020 for academic excellence in the insurance licensing courses. He educates insurance professionals through PNC Learning and as a Thought Leader at ReFrame Insurance.

In his day job as an insurance broker, he helps businesses with creative risk management solutions and strategic advice when it comes to insurance.

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