What is “Loss of Use” Insurance?

by Eric Chaffin | Last Updated: April 14, 2021

In auto insurance policies, loss of use coverage pays for the cost of a reimbursement, usually in the form of a rental car– while yours is being repaired.

Do you have loss of use coverage?

If you are making what is known as a first-party claim– under your insurance policy– then you are only entitled to what was included in the coverage terms.

Loss of use coverage is not included in all policies; it may be included under comprehensive coverage or something you add when you obtain or renew your policy. It is generally not expensive– so if you would not be able to go without your car if it needed repairs, it may be more cost-effective to add it.

If your car is damaged in an accident and you are not sure whether loss of use is covered, review your policy or have your Pittsburgh car accident lawyer look at it. Call your insurance company as soon as possible to confirm coverage and to put the company on notice of the claim.

What does a loss of use provision cover?

Your insurance policy will tell you exactly what it covers. It may specify the number of days, daily costs, or total costs allowed.

If you choose a rental vehicle, choose something comparable. If you have a sensible sedan but choose a luxury rental, the insurance company may not pay for it.

If the vehicle is used for business purposes, the inability to use it may also be covered. However, insurance companies tend to ask for more documentation to prove this kind of claim, so be prepared to gather a lot of paperwork.

What if another driver is at fault for the accident?

Except for certain no-fault states, if another driver was at fault for your damage, they are responsible for your loss. This means even if you do not have loss of use coverage– the other driver’s insurance company will likely reimburse you.

While the other party may ultimately be responsible– it may take some time to recover that compensation. If your own policy covers it, you should still make a claim so you can be paid quickly, and then if your carrier pays, it can recoup the payment.

Loss of use when your vehicle is a total loss

If your vehicle is “totaled,” you may not be able to recover for loss of use. Since this coverage is intended to reimburse you for the time it takes to get your vehicle repaired– the insurance company may pay out the pre-accident value of the vehicle and be done with the claim.

Some jurisdictions allow you to recover loss of use even if the vehicle is declared a total loss. These kinds of location-based differences make it very important to speak with a lawyer who is knowledgeable about the laws in your area.

How to file a loss of use claim

  1. Take photos of the damage to your vehicle.
  2. Inform your insurance company of your claim right away.
  3. Obtain a repair estimate from a qualified auto shop. Ask the shop to also include the time frame it expects to keep your vehicle– so you know how long you will need a replacement.
  4. If you normally use the vehicle for business purposes, gather the information you may need for a business claim, including tax records, employee billing records, and verification of the work.
  5. Speak with an attorney who can help your process to go smoothly.

Contact us today

Inability to use your vehicle while it is undergoing repairs after an accident is just one of the many hardships that you may experience. Take steps to reduce your burden by working with a Pittsburgh car accident attorney.

At Chaffin Luhana, our attorneys have 85 years of combined experience working for those who have been harmed by someone else’s negligence. Our core value is “Doing Good by Doing Right.”

Call today to schedule a free consultation.