Evaluating Road Service and Car Rental Coverages

From Insurance for Dummies by Jack Hungelmann

Other coverages offered by most insurers are towing/road service coverage and loss of use/car rental coverage. I believe road service coverage, though inexpensive, is better suited to automobile clubs, like AAA, Amoco, and others. They are good at it, claims are paperless, and they offer a number of other vehicle services — all for a flat fee. On the other hand, the coverage under car insurance is not paperless — you must pay the claim first yourself (usually), then file a formal claim report and wait two to three weeks for reimbursement. Coverage also is often limited to a dollar amount ($25, $50, $75, and so on). And a large number of these claims combined with other tickets and accidents can impair your relationship with your car insurance company. I’ve seen it happen several times.

Loss of use/car rental coverage is quite important. Everyone depends on their vehicle. If a collision or other covered loss deprives you of your car, you probably need a substitute. If your car is badly damaged, or there is a parts delay, that car rental bill could be several hundred dollars out-of-pocket. Loss of use covers the daily cost to rent a vehicle while yours is out of commission due to a covered loss. Costs covered typically range from $10 to $50 per day for up to 30 days. I recommend buying at least a $30 per day benefit.