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Reasons to Buy Loss of Use Coverage Auto Insurance

Fran
Lucy Lazarony February 16, 2021

You are driving home late at night and run a red light causing an accident. Your car is badly damaged but not totaled. The car that you hit is damaged as well. No one is seriously hurt in the accident. Your liability coverage will help to pay for the other car’s expenses and minor medical expenses of the driver. The accident is your fault and you have collision coverage but you only learned afterwards that you didn’t have loss of use coverage for a rental car while your car was in the repair shop.

Double-check with your insurance company about loss of use coverage auto insurance. Some insurance companies won’t pay for loss of use if you are at fault in an accident. But other insurance companies will cover loss of use coverage auto insurance even if you caused the accident. So reach out to your insurance agent for the details on loss of use coverage auto insurance at your insurance company. Getting loss of use coverage allows you to pay for transportation expenses while your car is in the repair shop. It makes a difficult situation easier.

What Is Loss of Use Coverage?

Rental cars, even bus rides and train rides cost money. So your car accident will make you dig into your wallet to pay for these costs. Luckily, there is loss of use coverage available.

Loss of use coverage auto insurance goes by a number of different terms including rental reimbursement coverage, rental car coverage and transportation expense coverage. Loss of use coverage auto insurance pays for a rental car or transportation costs while an insured’s vehicle is being repaired. Your declarations page will list loss of use coverage auto insurance.

Loss of Use Auto Coverage Determination

Loss of use coverage auto insurance claims are evaluated according to state limits. States vary on how much loss of use costs can be recovered. Most often, the owner of the car needs to have collision coverage and comprehensive coverage to be eligible for loss of use coverage auto insurance. Typically, you have to buy loss of use coverage auto insurance separately to get reimbursed for transportation costs. Loss of use coverage auto insurance rarely protects you by default. Loss of use coverage auto claims are sometimes determined by a three-part formula that calculates the number of days the vehicle was out of service multiplied by the daily rate of a similar property, in this case a rental car. Another common loss of use calculation for loss of use coverage auto claims is $30 for 30 days or a total of $900. If another driver causes the accident, your insurance company may have them pay the loss of use costs through what’s called subrogation, which allows an insurer to sue the party at fault in a car accident.

Loss of Use Chart for All 50 States and District of Columbia

Is it possible to recover loss of use in all 50 states? Here is a summary.

Alabama

For damages to commercial vehicles that are not reparable, the recovery of reasonable loss of use damages is allowed.

Alaska

Loss of use damages are recoverable for the reasonable period of time required to make repairs to the damaged vehicle. Loss of use also may be recovered when the vehicle is destroyed and is not able to be repaired. This loss of use is calculated by a reasonable view of the time it takes to replace the destroyed vehicle.

Arizona

Loss of use is recoverable as well as compensation for the cost of repair and the residual reduction in fair market value. Vehicles that are totally destroyed are not entitled to loss of use damages.

Arkansas

Loss of use may be recovered and can be determined by the rental value, the cost of hiring a substitute and ordinary profits that could have been made by use of the vehicle.

California

Loss of use is calculated by referencing the rental value of a similar property which the driver can hire for use during the period of time he or she is denied use of his or her own car.

Colorado

An owner may recover the loss of use of a vehicle for the length of time reasonably needed for repair.

Connecticut

Loss of use is considered an element of property damage.

Delaware

Loss of use of the motor vehicle includes compensation for damages to the motor vehicle. Loss of use may be recovered when damages are proved by the depreciated value of the vehicle.

District of Columbia

Loss of use is calculated by time needed for repairs. A vehicle owner’s recovery for loss of use must be limited to a period of time reasonably necessary to repair or replace the car.

Florida

Loss of use may amount to the reasonable rental value of a substitute vehicle during repairs.

Georgia

The recovery for the loss of use of an insured vehicle is appropriate when the car’s owner has been deprived of its use. There is no recovery for loss of use when a vehicle has been substantially destroyed.

Hawaii

Loss of use is calculated by the cost of a replacement vehicle, but the insured is not required to actually rent the vehicle. When the vehicle is totaled, the owner may recover loss of use for the period of time reasonably necessary for securing a replacement.

Idaho

Loss of use may be calculated in the replacement of the damaged vehicle or repair of the damaged vehicle.

Illinois

Individuals may recover for the loss of use of a car for the time reasonably necessary for the repairs to be made. Loss of use is calculated by the rental value of another vehicle, regardless if the vehicle is actually rented.

Indiana

Loss of use is calculated by a vehicle’s rental value. If loss of use is not calculated by a vehicle’s rental value, the loss of use can be calculated by the value of the vehicle’s use to the injured party for the time he or she was deprived of the vehicle’s use.

Iowa

There is recovery for loss of use when the vehicle can be repaired to good condition and the cost of the repair does not exceed the difference in market value of the vehicle before and after the accident.

Kansas

Loss of use is limited to the period necessary to complete repairs. The amount recovered in loss of use may not exceed the value of the vehicle before the accident.

Kentucky

Loss of use is recognized as a damage in a property damage liability claim. A loss of use claim is limited to the time necessary to make repairs on the damaged vehicle.

Louisiana

Loss of use may be recovered for the period necessary for the vehicle to be repaired. Damages for loss of use are measured by the rental cost of a substitute vehicle. There is no recovery for loss of use when a vehicle has been substantially destroyed.

Maine

Damages for loss of use are limited to rental costs of a replacement vehicle and these damages only apply for a reasonable amount of time. Rental costs for loss of use are possible even on destroyed vehicles.

Maryland

Damages may include loss of use of the vehicle. But there is no recovery for loss of use for vehicles that have been substantially destroyed.

Massachusetts

Recovery for loss of use must be limited to the time reasonably necessary to make repairs.

Michigan

There is recovery for the loss of use when a car is being repaired.

Minnesota

Loss of use may be recovered when a car is being repaired. Loss of use is appropriate even when the vehicle is destroyed.

Mississippi

Loss of use of a repairable vehicle is measured by the reasonable rental value of a similar vehicle.

Missouri

The calculation of the loss of use damages is the cost of renting a replacement vehicle during the time required for repairs. There is no recovery for loss of use when a vehicle has been substantially destroyed.

Montana

The owner can recover loss of use damages for being deprived of the use of the damaged vehicle. But these damages are only for a period of time necessary in making repairs or purchasing a replacement vehicle. Loss of use may be recovered when a vehicle is a total loss.

Nebraska

Loss of use is measured by the fair rental value of a similar vehicle or the amount actually paid for the rental car, whichever is less.

Nevada

Loss of use damages may be recovered for the time period that an individual cannot use their vehicle. Damages are measured by rental car costs and the time period it takes to repair the vehicle.

New Hampshire

Loss of use is measured by the cost of a rental vehicle during the time required for repairs.

New Jersey

Loss of use damages may be recovered for the time necessary to complete repairs to the vehicle. Damages may be calculated based on the rental value of a substitute vehicle. Even when a vehicle has been totally destroyed, loss of use damages may be awarded for a time period to buy a replacement vehicle.

New Mexico

Loss of use is available for the time needed to repair the vehicle. Loss of use damages are measured by the actual rental costs if a substitute vehicle were to be rented.

New York

Loss of use damage is determined according to the fair market rental value of the vehicle. Loss of use is not recoverable when the vehicle is a total loss.

North Carolina

If a vehicle can be economically repaired, the driver is entitled to recovery for loss of use during the time he or she was deprived of the vehicle. The measure of damages for loss of use is the cost of renting a similar vehicle during the time period for repairs. Loss of use is available even if the vehicle is destroyed and repairs aren’t feasible. The damages are limited to a reasonable time period to acquire a new vehicle.

North Dakota

Loss of use damages are available unless the restoration of the vehicle within a reasonable time period is impossible or impractical.

Ohio

When a vehicle is damaged only to the extent that it is reparable within a reasonable time, the owner also may recover for the loss of use of the vehicle for the time necessary for repairs. Loss of use may not be recovered if the vehicle is totaled.

Oklahoma

Damages for loss of use are allowed during a time period required for replacement or repair. A person whose vehicle is totaled can receive loss of use compensation from the time the car is destroyed to the time the car is replaced.

Oregon

A vehicle owner is entitled to recover for loss of use of a vehicle for a time reasonable to make repairs. The measure of damages is the rental value of a similar vehicle for the repair period.

Pennsylvania

The owner of a vehicle which is damaged, whether reparable or not, may recover loss of use damages.

Rhode Island

Loss of use may be recovered in Rhode Island even when a rental vehicle is supplied for free by a third party.

South Carolina

Loss of use damages may be recovered for the reasonable length of time the vehicle is repaired. When a vehicle is totally demolished, no loss of use damages may be recovered.

South Dakota

Loss of use damages are recoverable. Damages are usually measured by the rental value of the vehicle.

Tennessee

Loss of use damages are available when the vehicle is reparable.

Texas

Loss of use damages are possible but the driver must establish the reasonable rental value of a substitute car for the time required to repair or replace the driver’s damaged car. Loss of use damages are allowed in total-destruction cases.

Utah

A driver can recover any loss of use for a reasonable period of time until the vehicle can be repaired.

Vermont

Loss of use may be recovered for the cost of transportation or for rental cost of a substitute vehicle.

Virginia

The recovery of damages for loss of use are allowed and may be calculated by the cost incurred in hiring a comparable substitute vehicle for the time the driver is deprived of using the car.

Washington

Damages to compensate for loss of use may take into account the time in which the vehicle should have been repaired. Loss of use is recoverable when a vehicle is a total loss. This time period is limited to the date of the accident and the date on which the owner was paid for the cost of the vehicle.

West Virginia

Loss of use damages are recoverable. Loss of use is measured by rental value and it can be recovered during the period of time the owner is without the vehicle. Loss of use may be recovered when a vehicle is totaled.

Wisconsin

The time period for measuring loss of use damages is the time the vehicle is out of service. Loss of use may be recovered even when the owner does not obtain a replacement rental vehicle. Loss of use also can be recovered even when the vehicle is not reparable.

Wyoming

Loss of use damages may be recovered. Rental value is a practical measure used in determining damages for loss of use.

What Is the Cost of Loss of Use Coverage Auto Insurance

Loss of use coverage auto insurance is very inexpensive and usually only a few extra dollars a month. Before contacting your agent to add loss of use coverage auto insurance, why not get competitive rates to see if top-rated insurance companies near you offer that protection.

Loss of Use Coverage Auto Claims

It is a good idea to file a claim with your loss of use coverage auto insurance right after the accident, perhaps after you call to report the accident. First, file a police report. And second, call your insurance company and tell them about the accident and how you would like to use your loss of use coverage auto insurance.

What Makes You Eligible for a Loss of Use Coverage Auto Claim?

If you have been in a car accident and your vehicle has been damaged enough to be inoperable for a period of time, you may be able to file a claim for loss of use damages with your insurance company.

You must, of course, have loss of use coverage with your auto insurance.

Let’s say the other driver runs a stop sign and hits you as you were making your way through an intersection. Your car is badly damaged but can be repaired. But it will need some time in the repair shop. Lucky for you, you have collision insurance to cover the repairs. You have loss of use coverage auto insurance with your insurance company and file a claim so the insurance company may help to pay for the cost of a car rental while your car is in the shop. Your insurance company accepts your loss of use claim.

How Do I File a Loss of Use Coverage Auto Claim?

Get an accident report. Without one, you may not get loss of use coverage.

Gather all the documents relevant to the accident and repair of your vehicle including estimates. Most importantly, you’ll need evidence that you need substitute forms of transportation. How long do you have to file a loss of use auto claim? It is best to file a claim right after the accident. Coverage for loss of use damages may begin 48 hours after you report the accident to the insurance company. Some loss of use coverage auto insurance may be available for a maximum of 30 days.

If your car needs to be in the auto repair shop for more than 30 days, provide proof of damage to the insurance company. This proof of damage would include photos of the car and repair shop estimates. Can you get reimbursed after the rental car costs are paid? Yes, your insurance company may send you a claims check and you may use the money to reimburse yourself for the rental car payments that you have made. It is best to file a loss of use coverage auto claim right after filing the accident report so your transportation costs will be met. You can file a loss of use coverage auto claim if you were operating a car you owned, rented or leased.

When Am I Not Eligible for Loss of Use Coverage Auto Insurance?

You may have a hard time filing a loss of use coverage auto claim if your car was totaled. Not all states accept loss of use claims when a car is a total loss.

But you can file a loss of use coverage auto claim if your car had substantial damages that require you to need alternative forms of transportation. You are covered by a loss of use coverage auto claim if you are not at fault in the accident. And some insurers will cover an at-fault driver for a loss of use auto claim. It’s important to see what your insurer’s policy is before you buy.

How Much Can I Get from Loss of Use Auto Insurance?

Be reasonable with the forms of transportation you choose or else you may not be covered by loss of use coverage auto insurance.

Let’s say you drive a Honda Civic. You get into a car accident and are looking for loss of use damages so you may drive a rental car to work. A Civic is not a sports car so anything that is considered sporty is out. Choosing to rent a Toyota Corolla is a good option. It is in the same class as your Civic sedan and you’ll do just fine driving it for a few days. With loss of use auto claims there is usually a maximum rate per day for rentals. So check with your insurer on this rate before renting a car.

Can a Loss of Use Auto Claim be Denied?

Some insurers will deny your loss of use coverage auto claim if you were at fault in the accident. And some insurers will deny the loss of use coverage auto claim if there was gross negligence on your part.

In addition, you may have a maximum number of days worth of coverage if you file a loss of use auto claim and you may not be covered after that date. If your vehicle was totaled, your claim for loss of use coverage may be denied. This depends on the state so this is another thing to check with your insurance company.

Third Party Loss of Use Claims: What if You Bang Up the Rental?

Third party loss of use coverage auto claims by rental car companies are allowed in some states and not in others. Say you live in California and you’ve rented a car while your car is being fixed or while you’re on vacation and you get in an accident. You’re not injured and you’re not at fault in the accident. California law provides that loss of use cannot be recovered by a rental car company from the car’s renter or authorized driver. But loss of use may be recovered from third parties that cause damage to the vehicle. So the rental car company could sue the driver at fault in the accident.

What About Loss of Use Coverage Auto Insurance for a Commercial Fleet?

As you can imagine, a company can suffer great losses if a fleet vehicle is taken out of rotation. Some states will not allow the owner of the fleet to sue for loss of use coverage. But some states say that some damages for loss of use of a damaged commercial vehicle results in “loss of profits.”

Loss of Use Coverage Home Insurance and Renters Insurance

Also known as additional living expenses, loss of use coverage for home insurance helps pay for additional costs you might pay for housing and living expenses if a covered event makes your house uninhabitable. You would use this loss of use coverage while your house is being repaired. Loss of use coverage and additional living expenses also apply to renters insurance. So if a covered event damages the home you are renting, loss of use coverage for renters insurance will cover the costs of living in a new place for a little while your rented home gets repaired.

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