State Farm covers rental cars under specific conditions, depending on your policy type

Whether State Farm pays for a rental car depends on two things: whether you have rental reimbursement coverage on your policy, and whether the rental is happening because of a covered claim. If you have rental reimbursement and your car is damaged in an accident, theft, or other covered event, State Farm will typically pay for a rental car while yours is being repaired — up to a daily limit you chose when you bought the coverage. If you don't have this coverage, State Farm won't pay for a rental.

The coverage does not apply if you're renting a car for a vacation, a road trip, or any reason other than replacing a car that's out of service due to a covered loss. It also doesn't cover rentals if your car was damaged in an accident you caused and you don't have collision coverage, or if the damage came from something your policy excludes.

Key Takeaways

  • Rental reimbursement is an add-on coverage you must purchase separately; it does not come automatically with State Farm policies.
  • The coverage pays for a rental car only when your vehicle is being repaired after a covered loss like an accident or theft.
  • State Farm sets a daily limit (commonly $30 to $75 per day) and a total limit per claim when you add the coverage to your policy.
  • You must report the claim to State Farm and get approval before renting a car for the reimbursement to apply.
  • If you don't have rental reimbursement, you can still rent a car, but you will pay out of pocket.

How rental reimbursement coverage works with State Farm

Rental reimbursement is a separate add-on to your State Farm policy. When you buy it, you choose a daily limit — the amount State Farm will pay per day toward a rental car. Common daily limits are $30, $45, $60, or $75, though the exact options vary by state. You also choose a total limit per claim, which is usually 30 days' worth of the daily limit (so a $45 daily limit might come with a $1,350 total limit).

When your car is damaged in a covered accident, theft, or other insured event, you report the claim to State Farm. Once the claim is approved, you can rent a car. State Farm will reimburse you up to your daily limit for each day the rental is necessary — typically from the day your car goes into the shop until it's repaired and ready to pick up. You pay the rental company directly and submit the receipt to State Farm, or in some cases State Farm will pay the rental company directly if you arrange it through them.

The daily limit is what matters most. If your daily limit is $45 and the rental costs $65 per day, you pay the extra $20 out of pocket. If the repair takes 20 days and your total limit is $1,350, State Farm covers all 20 days at $45 each. If the repair takes 35 days, State Farm covers only 30 days (the total limit), and you cover the remaining 5 days yourself.

When State Farm will and won't cover a rental car

State Farm covers a rental car when your vehicle is out of service because of a covered loss. Covered losses include collision (damage from an accident), comprehensive (theft, weather, vandalism, animal strikes), and uninsured motorist property damage. The rental must be necessary — meaning your car is actually in the shop being repaired, not sitting in your driveway waiting for an appointment.

State Farm will not cover a rental if you don't have rental reimbursement on your policy, even if the loss itself is covered. It also won't cover a rental if the damage isn't covered by your policy — for example, if you caused an accident but don't have collision coverage, or if the damage came from wear and tear or lack of maintenance. Some policies exclude rentals for certain types of claims, so check your policy documents or call your agent to confirm what applies to your situation.

Rentals for personal use — vacation, visiting family, replacing a car you sold — are never covered by rental reimbursement, regardless of your policy. That coverage exists only to replace transportation while your insured vehicle is being repaired.

What you need to do to get reimbursed

First, report the claim to State Farm as soon as possible after the loss. You can call your agent, use the State Farm mobile app, or call the claims line. Provide details about what happened, when it happened, and where your car is now. State Farm will assign a claims adjuster who will inspect the damage and determine if it's covered.

Once the claim is approved, tell State Farm that you need a rental car. Some State Farm offices have preferred rental partners and can arrange the rental for you directly, which simplifies the reimbursement process. If you arrange the rental yourself, keep all receipts and documentation — the rental agreement, daily charges, and proof of payment. When the repair is complete and you pick up your car, submit the rental receipts to State Farm within the timeframe they specify (usually 30 to 90 days). State Farm will process the reimbursement and send payment to you or directly to the rental company, depending on how you arranged it.

If your claim is denied, State Farm will explain why in writing. If you disagree, you can ask your agent to review the decision or file a complaint with your state's insurance commissioner.

How much rental reimbursement costs and whether it's worth it

The cost of rental reimbursement varies by state, your age, driving record, and the daily limit you choose. A $30 daily limit typically costs less than a $75 daily limit. Most drivers pay between $10 and $30 per year for this coverage, though some pay more depending on their risk profile. Your State Farm agent can quote the exact cost for your situation.

Whether it's worth buying depends on how much you rely on your car and what you can afford to pay out of pocket. If you have a long commute, depend on your car for work, or live somewhere without good public transportation, rental reimbursement can save you money and stress during a repair. If you have savings to cover a rental for a few weeks, or if you can borrow a car from family or friends, you might skip it. The coverage is optional, so the decision is yours.

One thing to consider: if you finance or lease your car, your lender or leasing company may require you to carry rental reimbursement. Check your loan or lease agreement to see if it's mandatory.

Rental cars and your State Farm coverage while driving

When you're driving a rental car covered by State Farm's rental reimbursement, your State Farm liability and uninsured motorist coverage travel with you — they apply to the rental just as they do to your own car. This means if you cause an accident in the rental, your State Farm liability coverage pays for damage to the other person's vehicle and their medical bills (up to your policy limits). If an uninsured driver hits the rental, your uninsured motorist coverage applies.

However, collision and comprehensive coverage on the rental car itself may not be automatic. Most rental companies require you to buy their collision damage waiver or provide proof of coverage from your own insurance. Call State Farm before renting to ask whether your policy extends collision and comprehensive to rental cars. If it does, you can decline the rental company's waiver and save money. If it doesn't, you'll need to buy the rental company's coverage or pay out of pocket for any damage to the rental.

Frequently Asked Questions

Does State Farm automatically include rental car coverage?

No. Rental reimbursement is an optional add-on that you must purchase separately. If you don't have it on your policy, State Farm won't pay for a rental car, even if your own car is damaged in a covered accident. Check your policy documents or call your agent to see if you have it.

What if my car is in the shop for longer than my coverage limit?

You pay out of pocket for any rental days beyond your total limit. If your limit is $1,350 (30 days at $45 per day) and the repair takes 40 days, State Farm covers 30 days and you cover the remaining 10 days. This is why it's important to ask the repair shop for an estimate of how long the repair will take before you rent a car.

Can I rent a luxury car and have State Farm pay for it?

State Farm pays up to your daily limit, regardless of the car you rent. If your daily limit is $45 and you rent a $120-per-day luxury car, you pay the extra $75 per day. Most people rent a standard economy or mid-size car to stay within their daily limit.

What if I'm in an accident that's not my fault — does rental coverage still apply?

Yes, as long as you have rental reimbursement on your policy and the other driver's insurance hasn't yet agreed to pay for the rental. Once the other driver's insurance takes responsibility, they typically cover the rental car cost, and your State Farm rental reimbursement steps back. If liability is disputed, State Farm may cover the rental while the claim is being resolved.

Do I need to use a State Farm preferred rental company?

Not necessarily, but using a preferred partner can make the process easier because State Farm may pay them directly and handle the paperwork for you. If you rent from a non-preferred company, you'll likely pay upfront and submit receipts to State Farm for reimbursement, which takes longer. Ask your agent which rental companies State Farm works with in your area.