Rental reimbursement: Is it for you?

The adage, “You don’t know what you’ve got until it’s gone,” may not ring truer until the days following the loss of your car. Whether it’s in the mechanic’s shop or in a junk yard following an accident, living without wheels can be a challenge for some drivers.

Rental reimbursement coverage can be added to an auto insurance policy and can be a lifesaver if you suddenly find yourself without a car. To help you decide if this is the right rider to add to your insurance, here are a few things to consider.

Generally, rental reimbursement covers the cost of a rental car while your insured vehicle is being repaired following a covered loss. Limits on coverage are usually for a specific time period or a cost-per-day limit. Scheduled maintenance does not fall into the category of “covered loss,” so you’d have to pay for a rental car in that case.

You can rent a car from an agency that’s approved by your insurance company, and the agency then bills the carrier directly. Another option is for you to rent the car and submit the receipts to your insurance company for reimbursement.

If you need a car for daily activities and you don’t have access to a second car, it’s a good idea to add rental reimbursement coverage to your policy, according to Steve C. Klingemann, director of product management at AAA.

“It’s important to have rental reimbursement coverage if you can’t handle your daily routine without a car,” Klingemann said. “Your AAA insurance agent can review your current policy and add the coverage for you.”

An emergency fund is a click away

Job loss, unexpected hospitalization, a fender bender with the family car or storm damage to your home–these occurrences can certainly rain trouble onto our lives. That’s why financial advisors recommend a rainy day fund with enough liquid assets to cover three to six months’ worth of living expenses.

An emergency fund should primarily consist of money held in a high-yield savings account that can be accessed at any time.

In many cases, an “online” savings account may make more sense than using a physical bank. Benefits to online banking include:

Many traditional banks are not offering a savings option with interest high enough to meaningfully beat inflation, which is averaging about 2 percent through March 2011, according to the U.S. inflation calculator.

AAA and Discover Bank have partnered to bring members new, highly competitive, member-only rates on an online savings account, which are more than five times the national savings average.* No minimum balance is required, and a new account can be opened with a $500 minimum deposit. Accounts are FDIC insured up to $250,000 per depositor, per deposit category.

In addition to attractive interest rates, the AAA online savings account allows 24/7 access for free online money transfers using a secure and reliable Web site.

For details or to open your online savings account, visit AAA.com/Deposits.

You’ll need more than a smile for an umbrella on a rainy day. Let an emergency fund bring financial security to your life.

* The APY for the online savings account as of 4/26/11 is more than five times the national average for APY for interest-bearing savings accounts with balances of $500 as reported by Informa Research Services, Inc. Rates are subject to change at any time.