Personal Insurance Blog

When your car is laid up in the shop after a fender bender or when it’s been stolen, the thing you miss most, is your personal freedom of movement. Unless of course you have a loan car; or ‘substitute transportation’ as insurance companies properly call it.

Substitute Transportation (let’s call it ST for short) covers the possibility of you using car rental vehicle while you are without wheels. With this optional comprehensive auto cover, ST is valued from $15 a day up to $100 / day. It is an optional piece of insurance (under part 10 of your policy), that needs careful thought at renewal time. The important word here is OPTIONAL.

You can, of course, save some insurance costs if you can get by without ST. Can you?

If personal ‘automobility’ is essential to you, say because of work or family commitments, then there follows another key question; Have you got your ST coverage at the right level? You get what you pay for:

• ST will start 2 days after you report your car stolen and stops, if and when it is recovered. If you are without a car due to an accident, you can rent a replacement while yours is in the shop or before a new car is delivered. The standard of your ST depends upon the limit you signed up for on your policy - $15, $30, $45 or $100 a day - and for the number of days approved by the claims adjuster.

• If you drive an SUV or van, it’s a smart move to buy one of the higher ST standards so you can rent a ‘like for like’ car.

• Even if you don’t buy optional ST you can claim third party rental from the other driver’s insurer. But only if the other driver is at fault. This of course needs to be proven to the satisfaction of their insurer and will be subject to their approval. Normally the loan car will be ‘like for like’.

The whole claims process will be less hassle if you go through your own carrier for all coverages. Let them do the job of getting your money back from the guilty party.