Do insurance companies owe rental companies for loss of use to rental vehicles?

Usually not. Most policies state that loss of use is paid to the insured as a reimbursement for rental expenses paid. This means that the insured is responsible to the rental car company then they are reimbursed up to the lesser of the actual amount paid or the policy limits. I have gotten insurance carriers to set up a direct bill for some of my clients whom it would cause a hardship to put the money out first. Just be careful to check with your agent and make sure of coverage before running to get a rental car.