Loss of Use and Rental Reimbursement Frequently Asked Questions
Our team has compiled a list of frequently asked questions related to Loss of use and rental reimbursement.
What Can I Expect My Insurance Company to Pay While My Car is Being Repaired?
If your car is damaged in an accident and you have rental car insurance, your coverage is usually limited by a daily rate (e.g. $30 per day) and by the number of days a rental car is available (e.g. 20 days). Some rental coverage provides for Loss of Use as an alternative to renting a car, but again, coverage is limited by the terms of your insurance contract.
What Can I Expect to be Paid From the At-Fault Driver’s Insurance Company?
You’re entitled to recover either Loss of Use or rental car reimbursement from the at-fault driver’s insurance, which is not limited by a contractual daily rental rate or duration. 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.
Which is Better: Loss of Use or Rental Reimbursement?
That depends on whether you have other transportation available. If you need a car for work or getting the kids to school, etc., then renting a comparable car to your own and requesting rental reimbursement is a better option. On the other hand, if you don’t need a replacement car, then Loss of Use is a better option because you’re being paid for the rental value of your damaged car. Loss of Use is a significant, and often overlooked, aspect of property damage in most car accidents.
How is the Amount of Loss of Use Determined?
The best way to determine the rental value of a comparable vehicle is to go online and check the prices of rental car companies with similar vehicles to yours for rent. Save and print the price quotes you find, as these can be used to prove the reasonable per diem rental cost of your damaged vehicle. The next step is to multiply the per diem rate times the number of days reasonably necessary to repair your automobile.
Damages for Loss of Use can be significant. New, luxury, or exotic cars, trucks, and RV’s can rent for hundreds of dollars a day. Repairing these vehicles can take weeks and sometimes 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.
If my insurance provides a rental car of lesser value, can I still request Loss of Use from the at-fault driver’s insurance company?
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).
What are Common Mistakes People Make in Loss of Use Cases?
The main pitfall in collecting reimbursement for Loss of Use and Rental Car Reimbursement is delayed in getting the car inspected and repaired promptly. You have a duty to ‘mitigate your damages,’ which essentially means insurance companies are not obligated to pay for any delays you cause in getting your car inspected or repaired.
Do You Have Additional Questions About Loss Of Use Coverage?
Kerr & Sheldon is here to help. Get in touch with our dedicated team to find out more about your potential loss of use claim.