State Farm's rental car coverage depends on which policy you have and what caused the need for a rental
State Farm does cover rental cars, but only under specific circumstances and only if you have the right coverage on your policy. The most common way this works is through rental reimbursement coverage, which pays for a rental car when yours is being repaired after a covered claim — typically a collision, theft, or weather damage. This coverage does not kick in automatically; you have to add it to your policy when you buy or renew.
If you do not have rental reimbursement coverage, State Farm will not pay for a rental car. Some drivers assume their collision or comprehensive coverage includes it, but it does not. You are paying for the repair of your car, not for transportation while it is being fixed.
There is also a second scenario: if you are renting a car and get into an accident with it, your State Farm policy may cover the damage to the rental car itself — but only if you have collision and comprehensive coverage, and only if the rental company's insurance does not cover it first. This is less common and more complicated, and most people do not need to worry about it.
Key Takeaways
- Rental reimbursement coverage is optional and must be added to your State Farm policy; it does not come standard.
- This coverage pays for a rental car while yours is being repaired after a covered accident, theft, or weather damage.
- State Farm sets a daily limit (often $30 to $45 per day) and a total limit (often $900 to $1,350 per claim), so a luxury rental may not be fully covered.
- If you rent a car and damage it, your State Farm policy may cover the damage only if you have collision coverage and the rental company's insurance does not pay first.
How rental reimbursement coverage works after an accident
When you file a claim for damage to your car — say, after a collision or a tree falls on it — State Farm assigns an adjuster and begins the repair process. If you have rental reimbursement coverage on your policy, you can rent a car while yours is in the shop. State Farm will reimburse you for the rental cost, up to the daily and total limits on your policy.
You typically pay for the rental upfront and then submit the receipt to State Farm for reimbursement. Some rental companies have agreements with State Farm and may bill the insurer directly, but this is not may provide. Call your State Farm agent before you rent to ask whether the rental company you choose has a direct billing arrangement.
The coverage begins the day your car goes into the shop and ends the day it is ready to pick up. If the repair takes longer than expected, you are still covered as long as you stay within your policy limits. If the repair takes three weeks and your daily limit is $35, State Farm will pay up to $35 per day for up to 21 days (or however many days your total limit allows).
Daily and total limits: what you actually get paid
State Farm rental reimbursement coverage has two limits that work together. The daily limit is the maximum State Farm will pay per day — commonly $30, $35, $40, or $45, depending on the coverage level you chose. The total limit is the maximum State Farm will pay for the entire claim — often $900, $1,050, or $1,350.
If you rent a car for $50 per day but your daily limit is $35, State Farm pays $35 and you pay the $15 difference out of pocket. If your repair takes 30 days and your total limit is $900, State Farm pays $900 (30 days × $30 per day, for example) and stops. Any rental costs beyond that are your responsibility.
These limits are set when you buy the coverage, so you can choose a higher daily limit if you expect to rent a nicer car or live in an area where rentals are expensive. A higher limit costs more per month but gives you more protection. You can review your current limits by logging into your State Farm account or calling your agent.
When rental reimbursement does not apply
Rental reimbursement only covers rentals after a claim that State Farm has approved. If your car breaks down due to mechanical failure — the transmission fails, the engine overheats — that is not a covered claim, and rental reimbursement does not apply. Mechanical breakdowns are your responsibility, not the insurance company's.
The coverage also does not apply if you are at fault for an accident and do not have collision coverage. If you have liability-only insurance (the minimum required in most states), you are not covered for damage to your own car, so there is no repair happening and no rental to reimburse.
Rental reimbursement also does not cover rentals you choose to make on your own — for example, if you want to rent a car for a weekend trip. It only covers rentals that are necessary because your car is being repaired after a covered claim.
Damage to a rental car you are driving
If you rent a car from a rental company and get into an accident with it, your State Farm collision coverage may cover the damage to the rental car — but this is complicated and depends on several factors. First, you must have collision coverage on your own policy. Second, the rental company's insurance typically covers the damage first, and your State Farm policy covers only what the rental company's insurance does not pay. Third, you will likely have to pay the rental company's deductible out of pocket.
Most rental companies offer their own damage coverage when you rent, and many credit cards offer rental car protection as a cardholder benefit. Before you rely on your State Farm policy to cover a rental car you are driving, check what coverage the rental company offers and what your credit card covers. In most cases, one of those will be primary, and your State Farm policy will be secondary or not apply at all.
If you do get into an accident with a rental car, contact State Farm immediately and provide the rental agreement and the accident report. State Farm will coordinate with the rental company's insurance to determine who pays what.
How to add rental reimbursement to your policy
Rental reimbursement coverage is optional, so you have to request it. You can add it when you first buy a State Farm policy or at any time during your coverage period. Contact your State Farm agent by phone, through the State Farm website, or through the mobile app. Tell them you want to add rental reimbursement coverage and ask what daily and total limits are available.
Your agent will explain the cost of each coverage level and help you choose limits that fit your situation. If you have an older car that is worth very little, you might not need high limits because the repair cost will be lower and the rental period shorter. If you have a newer car or live in an area with expensive rentals, higher limits make sense.
Once you add the coverage, it takes effect on your next policy renewal or immediately if you request it mid-policy (though there may be a small additional charge for the remainder of your term). You can also remove or reduce the coverage at any time if your situation changes.
Comparing rental reimbursement to other options
Rental reimbursement coverage is not the only way to handle the cost of a rental car while yours is being repaired. Some people choose to skip the coverage and pay for rentals out of pocket when needed. Others use credit card rental benefits or rely on a family member's car. The right choice depends on your budget, how often you drive, and how much a rental car would cost in your area.
If you drive daily and cannot afford to miss work or skip appointments, rental reimbursement coverage is worth the monthly cost. If you have a backup car or live close to work and can use rideshare or public transit, you might not need it. If you rent a car only once every few years, the cost of one or two rentals out of pocket might be less than paying for coverage for years.
Calculate the monthly cost of the coverage you are considering, multiply it by 12, and compare that to how much you would spend on rentals in a typical year. If you rent a car once every two years for two weeks, you might spend $500 to $700 on rentals. If rental reimbursement costs $8 per month, you are paying $96 per year, which is a good deal. If it costs $25 per month, you are paying $300 per year, and you might come out ahead by skipping the coverage.
Frequently Asked Questions
Does rental reimbursement cover the cost of rideshare or a rental truck?
Rental reimbursement typically covers only rental cars from a rental company. Rideshare services like Uber or Lyft are usually not covered. Rental trucks or vans may or may not be covered depending on your policy language; contact State Farm to confirm. If you need transportation while your car is being repaired, ask your agent which options are covered before you pay out of pocket.
What if the repair takes longer than my total limit allows?
Once you reach your total limit, State Farm stops paying. If the repair takes longer, you pay for any additional rental days yourself. If the repair is taking an unusually long time, contact your State Farm adjuster and ask whether the repair shop can speed up the process. In rare cases, State Farm may approve additional coverage if the delay is due to parts availability or other factors beyond the repair shop's control.
Do I need rental reimbursement if I have a newer car?
A newer car is more likely to be in the shop longer after an accident because repairs are more complex, so rental reimbursement becomes more valuable. However, if you have a backup vehicle or can arrange transportation another way, you might not need it. Consider your personal situation: how much would a rental cost, how long would the repair take, and can you afford to pay for a rental if you need one?
Can I use rental reimbursement if my car is totaled?
No. Rental reimbursement covers the cost of a rental while your car is being repaired. If your car is totaled, State Farm pays you the actual cash value of the car, and the coverage ends. You would then need to buy a new car or rent one on your own dime while you shop for a replacement.
Does rental reimbursement cover damage to the rental car itself?
No. Rental reimbursement pays for the cost of renting a car while yours is being fixed. It does not cover damage to the rental car. If you damage a rental car, the rental company's insurance or your collision coverage would handle that claim separately.