State Farm covers rental cars only if you add rental reimbursement to your policy
State Farm's standard auto insurance does not automatically cover rental cars. You have to buy rental reimbursement coverage as an add-on, and you have to do it before you need it. Once you have it, State Farm will pay for a rental car while yours is being repaired after a covered accident or loss — up to a daily limit you choose when you buy the coverage.
The coverage does not apply to damage you cause to the rental car itself. It also does not cover rentals for routine maintenance, breakdowns outside of a covered claim, or trips you take while your car is simply parked at home. You need an active claim with State Farm for the repair of your own vehicle before rental reimbursement kicks in.
Key Takeaways
- Rental reimbursement is optional and must be added to your State Farm policy before you need it; it does not come standard.
- State Farm pays the rental company directly up to your chosen daily limit (typically $30, $45, or $60 per day) while your car is in the shop for a covered claim.
- The coverage applies only to accidents, theft, and other losses covered by your collision or comprehensive insurance — not to wear and tear or breakdowns.
- You can request a rental car through State Farm's claims process, and they will arrange it with a partner company rather than leaving you to find one yourself.
- If you decline rental reimbursement and later need a rental, you will pay out of pocket and cannot recover that cost from State Farm.
How rental reimbursement works with State Farm claims
When you file a claim for an accident or covered loss, State Farm's adjuster will ask whether you need a rental car. If you have rental reimbursement coverage, State Farm will arrange one through their network of rental companies — usually Enterprise, Hertz, or Budget, depending on your location. You do not have to shop for a rental yourself or pay upfront; State Farm coordinates directly with the rental company and pays them.
The rental period starts the day your car enters the repair shop and ends the day you pick it up. State Farm pays only up to your daily limit. If you chose $45 per day and the rental costs $60 per day, you pay the difference. The coverage also has a maximum number of days — typically 30 days per claim — though State Farm may extend this in unusual circumstances.
If you do not have rental reimbursement coverage, you can still rent a car, but you will pay for it yourself. State Farm will not reimburse you later, even if the accident was someone else's fault.
Daily limits and what they actually cost
When you add rental reimbursement to your State Farm policy, you choose a daily limit: usually $30, $45, or $60 per day. This is the maximum State Farm will pay per day toward the rental. The daily limit you choose affects your premium — higher limits cost more.
The daily limit should reflect what rental cars actually cost in your area. A $30 limit may cover a compact car in a rural area but will leave you short in a city or during peak travel season. A $45 or $60 limit gives you more breathing room and is often worth the small premium increase. Ask your State Farm agent what rental cars typically cost near you before you decide.
The total payout is capped at your daily limit multiplied by the number of days covered — so a $45 daily limit with a 30-day maximum means State Farm will pay up to $1,350 per claim. Once that maximum is reached, you pay any additional rental costs yourself.
What is not covered by rental reimbursement
Rental reimbursement covers only the cost of renting a replacement vehicle while your car is being repaired for a loss that State Farm's collision or comprehensive coverage would pay for. This means accidents, theft, vandalism, weather damage, and animal strikes are covered — but only if you have those coverages on your policy.
Routine maintenance and breakdowns are not covered. If your transmission fails or your engine needs work, rental reimbursement will not help, because there is no covered claim. The same applies if you simply want a rental car while your car sits in your driveway — there has to be an active repair claim for a covered loss.
Damage to the rental car itself is not covered by your rental reimbursement. If you damage the rental, the rental company's insurance or your liability coverage may apply, but rental reimbursement will not pay for it. This is why rental companies require you to buy their damage waiver or decline it and accept liability yourself.
How to add rental reimbursement to your State Farm policy
Contact your State Farm agent by phone, through the State Farm app, or online at statefarm.com. Tell them you want to add rental reimbursement coverage and ask what daily limit they recommend based on rental costs in your area. Your agent will quote the premium increase and add it to your policy immediately if you approve.
The coverage usually takes effect the same day you add it, though confirm this with your agent. You can add it anytime — you do not have to do it when you first buy your policy. However, you cannot add it after an accident has already happened; the coverage must be in place before the loss occurs.
If you already have rental reimbursement and want to change your daily limit, contact your agent to adjust it. Increasing the limit will raise your premium slightly; decreasing it will lower it.
What to do if you need a rental car after an accident
Call State Farm's claims line or file a claim through the app as soon as possible after the accident. Tell the adjuster that you need a rental car. If you have rental reimbursement coverage, the adjuster will arrange one for you — you do not have to find it yourself. State Farm will provide the rental company's contact information and confirm that they will bill State Farm directly.
When you pick up the rental, bring your driver's license and the rental authorization State Farm provides. The rental company may ask you to sign a damage waiver or decline coverage; read it carefully. If you decline the rental company's damage waiver, you are liable for any damage to the rental, so understand what you are agreeing to.
Keep receipts and documentation of the rental dates. When your car is ready, return the rental and notify State Farm. The claim will close once your vehicle is repaired and returned to you.
Rental reimbursement versus rideshare and other alternatives
Rental reimbursement is not the only way to handle transportation while your car is in the shop. Some people use rideshare apps like Uber or Lyft, carpool with friends, or use public transit. These options may be cheaper than a rental car, especially for short repair periods.
However, if your repair takes a week or longer, a rental car is usually more convenient and often less expensive than daily rideshare costs. Rental reimbursement removes the financial burden and the hassle of arranging transportation yourself — State Farm handles it.
If you decline rental reimbursement coverage to save money on your premium, consider whether you could afford a rental car out of pocket if you needed one. For most people, the premium increase for rental reimbursement is small enough that the peace of mind is worth it.
Frequently Asked Questions
Can I use rental reimbursement if someone else's insurance is paying for my accident?
Yes. Rental reimbursement covers your rental costs while your car is being repaired, regardless of who is at fault. If the other driver's insurance is paying for the repair, your rental reimbursement still applies. You may be able to recover the rental cost from the other driver's insurance later, but State Farm will cover it upfront.
What if my car is totaled — does rental reimbursement still apply?
Rental reimbursement applies only while your car is being repaired. If your car is totaled and declared a total loss, the rental coverage ends. State Farm will pay you the actual cash value of your vehicle, and you will need to find your own transportation after that.
Does rental reimbursement cover a loaner car from the repair shop?
No. Rental reimbursement covers only cars you rent from a rental company. If the repair shop provides a loaner car at no charge, you do not need rental reimbursement for it. If the shop charges for a loaner, that charge is typically not covered by rental reimbursement either.
Can I add rental reimbursement after an accident happens?
No. Rental reimbursement must be on your policy before the accident occurs. You cannot add coverage retroactively to cover a loss that has already happened. If you do not have it when you need it, you will have to pay for the rental yourself.
What happens if the repair takes longer than my daily limit allows?
Once you reach your maximum payout (daily limit multiplied by the number of days covered), State Farm stops paying. If your repair takes 35 days and your limit is 30 days, you pay for the extra 5 days yourself. You can ask State Farm to extend the coverage in unusual cases, but there is no may provide they will approve it.