What’s Better Loss of Use or Rental Car Reimbursement?
If your vehicle requires repairs after an accident caused by a negligent driver, you are entitled to recover either loss of use damages or rental car reimbursement against the responsible party’s insurer. Loss of Use damages are always better if you own a high-end expensive vehicle, but this can only be recovered against the responsible party’s insurer, which is not limited by a contractual daily rental rate or duration.
Loss of Use damages are calculated by multiplying the cost to rent a similar vehicle to yours with the number of days reasonably necessary to repair or replace your vehicle. If an insurer provides you with a rental vehicle during repairs, they will often claim the rental is “similar” to your vehicle and therefore no Loss of Use damages are recoverable.
What a “similar” vehicle means is a question of fact for the jury to decide. Insurers often argue that any luxury class vehicle is similar to any high-end vehicle. Obviously, this misses the point of what it costs to rent a similar vehicle to yours. While a Ferrari may cost $1500 per day to rent, a “luxury” base model Mercedes may cost less than $100 to rent. To avoid this defense, it’s generally better not to rent a similar vehicle but to rent a less expensive vehicle instead.
The cost to rent a similar vehicle to yours is generally determined by hiring an appraiser or reviewing costs from rental companies. For long term repairs, rental companies generally offer a discount which is applicable to your loss of use claim. For other high-end vehicles which can’t be rented from a traditional rental car company, Turo is another option. Turo is where private parties rent out their vehicles, similar to an Airbnb for rental properties.
Another common defense is that loss of use damages are not recoverable when you’re out of town or otherwise not able to use your vehicle for an extended time. Insurers will often review your social media posts. If they see you’ve posted on social media that you vacationed in Europe for a month during your loss of use period, you can expect that time will be deducted from your loss of use damages.
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 loss of use damages for your vehicle against the at-fault driver’s insurer, less the cost of the lesser quality rental car.
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. To view real-life examples, visit a list of settlements on our website.
The Kerr Law Firm understands how stressful it can be to be deprived of 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.