If your vehicle requires repairs after an accident, you may be asking yourself, “What’s better—loss of use or rental car reimbursement?” The answer is “it depends.”
While both loss of use and rental car costs can be recovered from the at-fault driver’s insurance (which is not limited by a contractual daily rental rate or duration), there are some special considerations to consider before choosing between the two.
If you require a replacement car (for example, if you don’t have another vehicle to use but need a car to get to work, drive your kids to school, go about your day, etc.), then getting a rental car and requesting rental reimbursement is the better option.
If you choose to recover rental car reimbursement, you can make a claim against the at-fault driver’s insurance for the cost to rent a similar vehicle for the time reasonably necessary to repair your automobile.
If you require a rental car, getting one through your own insurance is also an option if you have rental car insurance, but your coverage may be limited by a daily rate and by the number of days a rental car is available. But remember: if your insurer provides a lesser quality rental car as a substitute, you’re still entitled to claim the loss of use of a comparable vehicle against the at-fault driver’s insurer (less the cost of the lesser quality rental car).
If you do not require a replacement car, loss of use is the best option. “Loss of use” in automobile collisions typically refers to the money you’re entitled to when you’ve lost the use of your vehicle after an accident because it needs to be repaired or replaced.
The best way to determine what you’d be entitled to for loss of use is to go online and determine what the rental value of a comparable vehicle would be. This can be done by checking the prices of rental car companies with similar vehicles to yours for rent.
Save and print any price quotes you find, as they can be used to prove the reasonable per diem rental cost of your damaged vehicle. Finally, multiply the per diem rate times the number of days reasonably necessary to repair or replace your automobile. Loss of use can generally only be recovered from the at-fault driver’s insurance.
It’s important to note that loss of use is a significant, and often overlooked, aspect of property damage in most car accidents. New, luxury, or exotic cars, trucks, and recreational vehicles can rent for hundreds of dollars a day, and repairing these vehicles can take weeks, or even months to complete.
If a vehicle’s comparable rent is $100 per day and repairs take thirty days, then loss of use would be $3,000. This situation is more common than you’d think, especially for luxury vehicles. To use a real-life example, our office recovered loss of use for a Porsche of almost $60,000!
While loss of use depends on a number of factors, this example hopefully makes it clear that loss of use is an important thing to consider following an accident.
Do you Need Help with a Loss of Use Claim?
The Kerr & Sheldon team understands how stressful it can be to lose the use of your car, and we’re always here to answer any questions you have about rental reimbursement and loss of use. For more information, visit our website at www.kerrlawfirm.com, or visit our profiles on Facebook (www.facebook.com/kerrandsheldon) and Instagram (@kerrandsheldon).