"I rented a car because my vehicle was wrecked. Ten days ago the insurance
adjuster made me an offer for the total actual cash value (ACV) of my car.
Since then, we have been arguing back and forth about the total value of
the car. We still have not agreed, but I am in no hurry because he has
to pay for the rental car. Right?"
Most likely, the answer is no! In most states, insurance will pay
for the rental car while your vehicle is being repaired. However, it
only covers a reasonable time for loss of use. On the other hand, when the
vehicle has been totaled, there generally is no obligation to pay for a
rental car after you have received a reasonable fair market offer. Take a
day or so to consider the offer. It does not have to be the final
settlement amount but, if the offer for replacement is within reason,
courts have held that the rights to a rental car cease. In response to the
question above, after you have received a ball-park fair offer, try to
reach a deal quickly and hope the adjuster will cover the rental. He is
probably not obliged to do so, but you should always act as if he is, and
always ask for payment of full rental car expenses after you have
agreed on a price for your car.
In some states, insurance may pay rental (although only about two-thirds of
the actual cost) while your car is undergoing repairs. That money can be
paid whether you rent a car or not, though you usually will not receive
rental payments unless you actually rent a car. The fact that your sister,
Mary, is good enough to loan you her car is something that will benefit you
because of the convenience. However, the insurance company is not going to
pay Mary for letting you use her car.
If you have purchased collision insurance, you can usually work through
your own company to obtain a rental car. It is a good idea to coordinate
the authorization and use of the rental car with the manager of the auto
body shop and the insurance company. That way, the body shop has an idea of
any insurance time constraints. Otherwise, you may find that the insurance
company terminates rental use at 30 days or so, even though the parts for
your repair have not yet arrived at the shop.
If you are reading this before an accident, consider calling your insurance
agent to make sure you have reimbursement for towing charges and rental in
the event of a collision. If not, consider adding coverage for both of
those items because they are very helpful and not that expensive.