State Farm will pay for a rental car during repairs if you have optional Car Rental Expense coverage on your policy or if another driver was at fault for the accident. Standard auto insurance policies do not automatically include rental reimbursement, meaning coverage depends entirely on your specific policy elections or third-party liability.
How State Farm Rental Coverage Works
Car Rental Expense coverage—often referred to as rental reimbursement—is an optional add-on to a primary State Farm auto insurance policy. It pays for temporary transportation while your primary vehicle is out of service.
To use this benefit under your own policy, the vehicle must be non-drivable or undergoing repairs due to a covered loss. A covered loss generally includes accidents falling under your collision or comprehensive coverage, such as a vehicle crash, hail damage, fallen trees, vandalism, or theft.
If your car is in the repair shop for routine maintenance, oil changes, or mechanical wear-and-tear, State Farm will not pay for a rental car.
Daily and Per-Loss Limits
State Farm structures rental reimbursement using specific caps: a daily limit and an overall per-loss limit. These limits are detailed on your policy’s Declarations Page.
The daily limit dictates the maximum amount State Farm pays for each day you have the rental car. Common limit structures include set dollar caps, such as $25, $30, or $50 per day. Alternatively, some policies specify a percentage rate, where State Farm covers a designated percentage of the daily rental fee.
The per-loss limit sets the maximum total amount State Farm pays for a single claim. For instance, if your policy features a $30 per day and $900 per-loss limit, the policy will cover up to $30 daily until the total payout hits $900. If you select a rental car that exceeds your daily limit, you must pay the difference out of pocket.
When Coverage Begins and Ends
The timeline for using your State Farm rental coverage depends on whether your vehicle is safe to drive immediately following the incident.
- Non-drivable vehicles: If your vehicle is unsafe, illegal to drive, or severely damaged, rental coverage begins immediately on the date of the loss.
- Drivable vehicles: If your car remains safe and legal to drive after an accident, coverage begins on the specific day your vehicle is dropped off at the repair facility.
Coverage ends on the day your vehicle repairs are finished, when your vehicle is returned to you, or when you reach your policy’s total per-loss dollar cap—whichever occurs first.
Getting a Rental Car When the Other Driver Is at Fault
If another driver causes an accident that damages your car, their liability insurance is legally responsible for your temporary transportation costs while your vehicle is being repaired. In this situation, you have two primary options:
- File through the at-fault driver’s insurance: The other insurer pays for your rental directly. This saves you from paying a deductible or using your own policy limits, but it requires the other insurer to accept fault immediately. If fault is disputed, this process can stall.
- File through your State Farm policy: If you carry rental reimbursement, State Farm can set up your rental right away. State Farm will later pursue the at-fault driver’s insurance company through subrogation to recover the rental costs and your deductible.
Direct Billing vs. Out-of-Pocket Reimbursement
State Farm maintains arrangements with national car rental agencies, including Enterprise Rent-A-Car, Hertz, and Avis. If you book through State Farm’s online claim portal or through your claims representative using a partner vendor, State Farm typically arranges direct billing. Under direct billing, the rental agency invoices State Farm directly up to your policy’s daily limit.
If you choose an independent rental agency or an alternative mode of transportation, you generally must pay upfront. You can then submit detailed itemized receipts to State Farm for reimbursement up to your allowable policy limits.
Out-of-Pocket Expenses Not Covered
State Farm’s rental reimbursement strictly covers the base rental cost and associated daily taxes. It does not cover secondary expenses associated with operating the vehicle.
Excluded out-of-pocket expenses include:
- Gasoline or electric vehicle charging fees
- Security deposits held by the rental agency
- Optional collision damage waivers (CDW) or supplemental insurance purchased at the rental counter
- Toll fees, parking charges, or traffic violation fines
- Excess mileage charges outside standard daily allowances
In most instances, your primary State Farm auto insurance coverage transfers to the rental vehicle while your personal car is being repaired, reducing the need to purchase extra insurance products from the rental company.
What Happens if Your Car Is Totaled?
If State Farm determines that your vehicle is a total loss, rental car rules shift slightly. Rental coverage does not continue indefinitely until you purchase a new vehicle.
Once State Farm declares the car a total loss and calculates the actual cash value settlement, rental reimbursement typically terminates within a set window—usually 3 to 7 days after the settlement offer is made. This brief window provides time to complete the paperwork and locate replacement transportation before rental coverage expires.
