Loss of use coverage: The surprising impact on customer satisfaction and retention

May 1, 2025

The hours and days after an accident can be incredibly overwhelming for a vehicle owner. Being without a vehicle can significantly disrupt day-to-day life. For insurance professionals, providing a seamless claims experience is crucial to customer satisfaction, and one key offering that makes a significant difference is loss of use, also known as rental reimbursement coverage. This often-overlooked optional add-on can be a deciding factor in customer retention and satisfaction. In fact, Enterprise data found that 50 per cent of drivers would be willing to pay more to ensure their out-of-pocket costs are covered during a claim.

Minimizing disruptions during repairs

When a customer’s vehicle is in the shop for repairs, they expect to stay mobile. According to the latest Length of Rental data from Enterprise*, collision-related repairs in Canada can take close to 15 days. Rental reimbursement coverage helps cover the cost of a rental car, minimizing the inconvenience and reducing frustration during what can already be a stressful time.

However, it is not enough for a policyholder to have coverage, they expect to have the right level of coverage for a vehicle that will help them maintain their lifestyle during a repair. The more out-of-pocket a policyholder with rental reimbursements coverage pays, the less satisfied they are with their provider.

Did you know?

Only 53 per cent of eligible policyholders have rental reimbursement coverage.

54 per cent of drivers with rental reimbursement coverage that rented still have out-of-pocket expenses.

60 per cent of policyholders with rental reimbursement coverage learned about it through their insurance agents.

The role of insurance professionals

Insurance professionals play a key role in educating their policyholders about the importance of rental reimbursement coverage. With their guidance, policyholders can fully understand the benefits of rental reimbursement coverage and how it can positively impact their lives in the event of a needed replacement rental. It is not just about offering the coverage—it is about educating clients on its value.

How to help policyholders make informed decisions

Here are some practical steps that insurance professionals can take to ensure their policyholders are well-informed and well-served:

Ensure understanding: Insurance professionals should take the time to explain how rental reimbursement coverage works, its benefits, and why it is important to have in place. Discussing scenarios where it would be beneficial, such as when a car is in the shop for an extended period, will help clients grasp its importance.

Determine the right limits: Insurance professionals should work with customers to determine the appropriate limits on their rental reimbursement coverage to match their replacement transportation needs.

Tailor to the policyholder’s situation: Insurance professionals should consider the client’s lifestyle when discussing rental reimbursement coverage. For example, a single person with a short commute may not need as high a limit as a family who may require a large vehicle type to maintain their lifestyle. By tailoring the coverage, agents can ensure that policyholders are not paying for more coverage than they need while also ensuring they have enough in the event of an emergency.

Final thoughts

Rental reimbursement coverage is a small investment that can make a huge difference in customer satisfaction and retention. By educating policyholders on its benefits, insurance professionals can help them make informed decisions that align with their needs.

To learn more about rental reimbursement coverage click here.

*2024 Enterprise Rental Reimbursement Study with Qualtrics

This blog has been created in partnership with Enterprise.