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A few months ago, I was (ironically) on my way to a car parts store when a limousine cut me off from all things. Unfortunately, my little little Miata couldn’t stop in time:
Luckily, everyone was fine and the limousine wasn’t full of teenagers who wouldn’t come to the prom. Officially PD Atlanta quoted another driver and found him guilty, so after we all broke up, I mentally prepared for some phrase with their insurance company.
Luckily he had another driver State farm, which are quite polite and easy to handle. After a friendly young representative walked me through everything I was entitled to, I had a question:
“What about compensation for loss of use?”
There was a pause, as if I had just asked for a rare, antique wine in a sumptuous restaurant, and they had to remember if there was a bottle hidden in the cellar.
The thing is, I don’t blame the representative for getting caught up in the issue a bit. Mostly only lawyers and insurers like me usually know what LOUs make up is.
But it is definitely worth knowing as you can easy earned a few extra hundred dollars after the next fender bumper. For example, a representative of the State Farm typed on the keyboard for a minute and called me with good news:
“All right, sir – with the loss of account usage, you’re entitled to an additional $ 475.”
If you are the victim of a car accident and lose the use of the car for a while, you are almost certainly entitled to an additional payment in the form of compensation for the loss of use.
When it comes to cars, carthe associated loss of use compensation is intended to cover the inconvenience / cost of losing access to your car when it is in a repair shop.
V theory, the loss of use must cover the cost of hire or public transport as good as loss of income if you need a car to make money (for example, driving for public transport companies).
In reality, however, most insurance companies will strictly pay for the loss of use per diem. Examples can be applied to strictly commercial vehicles such as taxis or trucks, but the rules on passenger cars, sometimes used for commercial purposes, are bleak.
It doesn’t hurt to ask!
Simply put, you are usually entitled to automatically linked compensation for loss of use if:
- You have the right to rent a car.
- Reject it or the rental is not available.
Magic words coming from yours insurance company or second drivers are “rent a car”.
A lot of people here don’t know
If your insurance company offers you a car rental, you can actually decline it and accept the money instead. That money won’t be as much as the cost of rent, but it’s still something – and it’s called compensation for loss of use.
If you are not sure if you need to rent a car, you can take it for a few days and lose your daily allowance the next day. Your insurance agent will all together later, after you get your car back, you will get a check for loss due to loss of use.
In this case, you are entitled to rent a car according to the insurance claim
Your right to rent a car depends on who is to blame for the accident:
- If another driver was to blame for the accident. Yo You will have the right to rent a car paid for by another driver’s insurance as long as your car remains “impassable” (more on this below).
- If the accident was your fault / no fault. You will only be entitled to rent a car if you have reimbursement of car rental costs as part of your policy own insurance company.
The latter example highlights why paying to cover a rent refund is a good idea, even if you don’t plan to use the rent. I had previously omitted the rent refund cover because I thought I would be fine without a car for a while. After all, I work from home and have a bike with which I can buy groceries.
Reimbursement coverage, however, can still be helpful, as you can often use it for rent but instead of losing the per diem for use. Check the terms of car rental coverage with your provider.
How long has your car been considered “impassable”?
I mentioned earlier that the insurance of the driver who is at fault will pay your rent as long as your car is “impassable”.
According to HG.orgif your car has what of the following:
- Damaged, cracked or missing mirrors.
- Damaged, missing or incorrectly placed exterior lights.
- Spotlights damaged or missing.
- Damaged or silent horn.
- Bent hood.
- Bumpers are missing.
- Body with serrated edges.
- Cracked windshield.
- The tires / wheels are not aligned.
- Poorly functioning brakes.
Your car is legally indestructible and you have the right to rent a car until it is repaired.
When you are eligible for a lease, how do you gain a loss of use instead?
When you or another insurance company tells you that you are qualified to rent, you can simply tell them that they would rather have compensation for the loss of use. It helps to determine their compensation rate of loss of use, which is usually the same per diem.
You can then decide on which days you want to rent and on which days you want cash.
Do you need to know exactly when you need to rent versus cash?
In most cases, you won’t actually have to decide on the spot. At the State Farm, they gave me a special number to call the Enterprise, and told me to arrange to rent it every day when I needed it, without haste. Then every day me ni if they had rent, they would give me a per diem. I would check everything when I get the car back.
The point is this: when the provider offers you a rental, make it clear that you want compensation for the loss of use for each day you were entitled to the rental, but ni take one. Insurance companies will not argue because their daily subsistence loss is generally much less than they would pay for a one-day rental.
How much is the compensation for loss of use typically worth it?
State Farm paid me $ 25 a day in compensation for loss of use.
It may not sound like much, but it adds up quickly – especially if your car has been legally unmanageable for days, weeks or months.
If you receive compensation for loss of use, insurance companies will generally want you to relocate a few fast – you can’t let a car sit for a year and raise $ 9,000 in a LOU comp. Providers typically say you will qualify for a LOU if you get the car at the store within a “reasonable” time, perhaps within one to two weeks.
Personally, I wanted to fix my little Miata so much that I got it to the store in an hour State farm officially pleaded guilty to their driver for the accident. My store also moved quickly – parts arrived the next day and I was back on the road in three days (thanks, Adnan!).
But even though it’s all on mine the end moved at lightning speed, the whole process still took 19 days:
- 10 days to publish a police report.
- Another 6 days for State Farm to collect the statement of the other driver and accept responsibility.
- 3 days for repairs.
Thus, for a fender fender, 19 days and $ 475 compensation for loss of use could be considered at a low value. If, due to your next accident, your car will be immobile for a month or longer, you may be entitled to much more.
Here is a summary of the automatically related loss compensation and when it is used:
- Compensation for loss of use covers the cost / inconvenience of losing the use of your car until you repair it.
- It is generally accepted that if an insurance company offers you a car rental, you can refuse it and instead take compensation for the loss of use – it is usually paid per diem for each day no rent a car.
- To lose use, you’ll qualify for every day when your car is “indestructible,” which can only last like a broken tail light or a protruding fender.
- The per diem rate to compensate for loss of use could be as low as $ 25, but given how often insurance situations can take weeks to resolve, these per diems increase rapidly.
The next time you or someone you are interested in is in an accident, ask about compensation for loss of use when the dust settles. Don’t leave $ 500 + on the table!