Time to re-examine rental reimbursement coverage limits

May 3, 2023

For years, we have been writing personal auto policies that afford 30 days of rental reimbursement coverage at various daily limits. And for years, this was enough coverage. If a vehicle was damaged in an accident, the insured could expect the garage of his or her choice to order the parts, and then perform the repair work within 30 days.

Then, the COVID pandemic affected supply chains, and getting parts began to take four to six weeks. And, while some supply-chains have recovered, this continues to be an issue for others. Additionally, so many small businesses are understaffed, so that even if they have the parts, it can be difficult to get the work done with any expediency. The result is, the rental reimbursement coverage that we are selling is not sufficient to get our customers through the entire repair process—meaning that for many, they must pay out-of-pocket for some of their rental expense.

In my agency, we have been advising our customers that if the car can be driven, they should wait to drop their car off at the body shop until the parts have arrived, and the shop is ready to complete the repairs. If the vehicle can’t be driven, we don’t have a lot of advice other than to see if the insured can borrow a vehicle from a family member or a friend.

This is a great opportunity for insurance carriers to allow an increase to the maximum number of days of coverage currently able to be purchased, or simply provide a lump sum to be used at the customer’s discretion over the time necessary to complete the repairs.

Ideally, we’d like to see the supply chain and employment issues disappear completely. However, in the meantime, we recognize that there is a need for better coverage.

David Sidle, II, CIC, CPIA
David L. Sidle Agency Inc. | + posts

David L. Sidle, II, CIC, CPIA, is president/CEO of the David L. Sidle Agency Inc., in Montour Falls, N.Y. His agency has been a member of PIANY since 1974; he joined the New York Young Insurance Professionals in 1991. Currently, he is president of PIA of New York. Sidle has served the association in a multitude of roles including as an officer and member of the board of directors; as chair of the Government Affairs, and Education and Conference committees. He is a member of the Company/Industry, and Membership & Benefits committees. Additionally, he is chair of the Southern Tier Regional Awareness Committee. In 2009, PIANY named Sidle Committee Chair of the Year. This award recognizes the time and effort agent volunteers give to help guide the association and implement programs to benefit its members. Sidle was honored for his work as education chairperson of the Business Issues, Programs & Services Committee.

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