What is Loss of Use Auto Insurance?

A loss of use auto insurance claim provides reimbursement for a rental vehicle following an accident. Most policies include this important coverage, along with collision and comprehensive plans. The idea is to temporarily help you maintain your standard of living while your vehicle is being repaired. Since you’re paying to insure an asset you can no longer use, the idea is that the insurance company legally owes you a per diem amount toward reasonable substitute transportation.

Does every insurance policy include loss of use coverage?

Loss of use coverage is not included in basic liability policies, but as noted above, it is typically included with collision and comprehensive policies. Typically, loss of use coverage only costs a few extra dollars a month, making it a worthwhile addition to a car insurance policy, particularly for people who rely on their vehicles for daily commuting. If you’re unclear on what your individual policy does or doesn’t cover, a personal injury lawyer could help explain it to you during a free consultation.

What is included with loss of use coverage?

Your insurer allows you a limited per diem (usually up to $50/day) to put toward a rental vehicle. Make sure you know how much you are allowed before renting. Insurance companies expect you to select a comparable model to the one you already own and insure. In other words, it’s not time to test drive that luxury sports car you’ve always wanted– unless you don’t mind your claim being denied!

Can I claim loss of use even without renting another vehicle?

Perhaps you prefer borrowing a car from a friend, spouse, or another family member, or even using public transportation– rather than dealing with the rental car agency. You may still be able to obtain compensation by multiplying the per diem by the number of days it will take to repair your vehicle. In other cases, you may file a claim based on the “measure of damage” you placed on the vehicle you borrowed based on IRS estimates for the mileage you put on.

What if I was at-fault for the accident?

Some insurers will deny coverage if you were at-fault for the accident. However, in a “no-fault” state like New York, however, it is common to receive coverage, regardless of who was to blame for causing the crash.

When can I claim loss of use?

Most people ask the insurance company about loss of use coverage right after they drop their vehicles off at the repair shop. It doesn’t matter whether you own the vehicle outright, lease it, or have financed it with a loan. As long as the damage was substantial enough to involve repairs, you can make a loss of use claim.

What if my vehicle was declared a total loss?

Some insurers may not offer loss of use coverage if your vehicle was totaled; however, they are more likely to cut you a check for the value of the lost vehicle. If it takes an unusually long time to render a decision on how much to offer for a settlement, you may be offered loss of use compensation during this time.

What do I need to claim loss of use?

Having the right documents in order is important for ensuring a smooth loss of use claims process. You will need to present your insurance company with an accident report, photos of the damaged vehicle, and estimates for the repair work. If your car is in the repair shop for more than 30 days, you may be required to submit additional proof of damage.

Why might auto insurers deny loss of use coverage?

You may encounter several objections to your loss of use coverage:

  • The insurer doesn’t believe the damage to your vehicle was as extensive as you allege.
  • The insurer doesn’t feel you need your vehicle daily to conduct your ordinary affairs.
  • The insurer doesn’t think you are making any reasonable effort to get your vehicle promptly repaired.

Do you need a lawyer? Contact us at Douglas and London

The days that follow a motor vehicle accident can be difficult. Although it is not a requirement, working with a car accident attorney in New York from Douglas and London can help you better understand your insurance policy, negotiate loss of use coverage, and file your paperwork promptly. If your claim has been denied, we can help advocate for your rights.