What is a Loss of Use Claim After a Car Accident?
Using your vehicle after a car accident – loss of use
After an accident, your vehicle is generally unusable either due to damages that require repairs or because it has been deemed a total loss. In either case, you have to find other ways to get around because you no longer use your vehicle. If the vehicle is repairable, the loss of use will be for the duration of time that the vehicle is being evaluated and repaired. If it is considered a total loss, the loss of use will be for the duration of time that the person is without their vehicle and waiting for compensation. During this time, the person may rely on alternative transportation means such as rental cars, Turo.com, public transportation, taxis, Lyft, or Uber.
What are the types of losses involved in a property damage claim?
1. Vehicle repair
If you have been involved in a car accident resulting in property damage to your vehicle, you may be entitled to compensation for the cost of repairs. Usually, the autobody shop will handle most of the work for you. The first step is to obtain an initial estimate from a reputable auto repair shop. I always advise my clients not to use the insurance companies’ “preferred” shops, as there may be conflicts of interest involved with working with those shops. Once work has been done, the autobody shop should submit supplemental estimates to the insurance company for repairs not anticipated by the initial estimate. A good shop will usually find additional repairs when they tear down the vehicle.
2. Total-loss declaration and replacement
When a vehicle is severely damaged, the insurance company may declare it a total loss and provide a settlement to replace it. The first step in this process is determining the damaged vehicle’s actual cash value (ACV). This is calculated based on the vehicle’s age, mileage, and condition before the damage occurred. If the vehicle’s repair cost exceeds a certain percentage of its ACV, 65% in Nevada, it will be declared a total loss. Once the vehicle is declared a total loss, the insurance company will provide a settlement based on the ACV minus any applicable deductible. The settlement amount can vary based on factors such as the type of policy, state regulations, and the specific details of the claim. It’s important to note that the replacement value is not necessarily the same as the purchase price of a new vehicle.
3. Diminished Value
A diminished value claim refers to a vehicle’s loss of value after being involved in an accident. When a car is damaged in an accident, even after being repaired, it is worth less than its original value because of its history of being in an accident. This reduction in value can affect the resale or trade-in value of the car. A diminished value claim aims to recover the loss of the vehicle’s market value as a result of the accident.
For instance, if a car worth $20,000 is involved in an accident and repaired, it may now only be worth $16,000 because of the accident history. The owner can file a diminished value claim to recover the $4,000 lost due to the accident. However, in Nevada, there is no codified right to a first-party claim for diminution of value. This means that you cannot collect against your own policy for any loss of value that your vehicle has incurred due to an accident if there are provisions in your insurance policy that prohibit recovery of diminished value.
If you’ve been in an accident and believe your car has diminished in value, it’s important to speak to a professional auto accident lawyer who can help you navigate the complex process of filing a diminished value claim.
4. Loss of Use
Loss of use is a legal term to describe the damages a plaintiff seeks for their inability to use a thing damaged due to an incident. In a car accident, that thing is your vehicle. When a motorist negligently injures another person and causes them property damage, the injured person may seek to recover for both the injuries to their person and the damage to their property.
Generally, a loss of use claim can be made when a person is in an automobile accident, is not at fault, and the vehicle becomes unusable for some period of time, resulting in damages. Loss of use compensation is usually measured by the daily rental rate of a “comparable” vehicle and can be claimed against the at-fault party’s insurance company. It is important to file a loss of use claim after the repair has been completed so you can fully quantify your loss.
Making a loss of use claim after a car accident
A loss of use claim is a type of claim that car accident victims can file against the defendant’s insurance company when they cannot use their car due to repairs or replacement. This claim seeks to compensate the victim for the cost of alternative transportation, such as a rental car or ride-sharing services when their car is unavailable. A loss of use claim may also be applicable for those who use their vehicle for work and suffer a loss of income due to the accident.
To make a successful loss of use claim, it’s important to gather evidence such as comparable vehicle rental listings, rental car agreements, receipts for transportation expenses, and documentation of lost income. It’s also crucial to accurately calculate the claim’s value, factoring in the cost of alternative transportation and any lost income. Negotiating with insurance companies can be challenging, so working with an experienced personal injury attorney can help protect the victim’s rights throughout the claims process.
To maximize the value of a loss of use claim, it’s important to keep detailed records of all transportation and lost income expenses. Victims should also be aware of their insurance policy’s coverage for loss of use claims and seek legal advice if they have any questions. By following these steps and working with an experienced attorney, car accident victims can increase their chances of receiving fair compensation for their loss of use damages. If you have been in a car accident and need assistance with a loss of use claim, contact a personal injury attorney to schedule a free consultation.
How much is a loss of use claim usually worth?
The amount of money you can recover from a loss of use claim after a car accident depends on various factors, such as the cost of renting a similar vehicle while your car is being repaired. Generally, loss of use claims are limited to a reasonable amount of money. For instance, if your compact car has a market value of $5,000, a reasonable substitute vehicle would be a similar compact car, not a luxury sports car. Your insurance policy usually provides a per diem amount that you can use towards a rental vehicle, such as $50 per day. However, that same $50 per day does not seem reasonable when you usually drive a car that would cost $500 per day to rent.
Insurance companies want to put you in the cheapest rental car possible and hope you don’t try to recover for the actual value lost. However, a properly documented claim will show the at-fault party’s insurance company that you are serious about your claim. In addition, working with a personal injury attorney that assists with loss of use claims will increase your chances of maximizing your loss of use recovery.
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Loss of Use FAQs
Who pays loss of use after a car accident?
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After a car accident, if the fault is determined, the at-fault party is responsible for paying for the losses incurred by the other party, including loss of use. Loss of use is the time when the damaged vehicle is being repaired or replaced and is unable to be used. Because the owner requires substitute transportation, the at-fault party’s insurance company will compensate the owner for their loss of use during this period.
What factors determine the value of a loss of use claim?
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Loss of use refers to the damages a plaintiff seeks for their inability to use the vehicle damaged due to an accident. When calculating loss of use, there are several factors to consider. Firstly, the market value of a comparable rental should be determined. Secondly, the insurance premium and maintenance costs incurred should be considered.
What is the typical value of a loss of use claim?
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The typical value of a Loss of Use claim in the context of a car accident depends on various factors, such as the cost of renting a similar vehicle. Insurance companies want you to think they can set the rate even when their insured is at fault. I don’t believe that this should be the case. Generally, loss of use claims are limited to a reasonable amount of money that it costs you to rent a comparable vehicle or pay for other transportation while your vehicle is being repaired. For instance, if your compact vehicle had a market value of $5,000, a reasonable substitute vehicle would be a similar compact car. Typically, your insurance policy will provide a per diem amount that you can use towards a rental vehicle, such as $50 per day. However, unreasonable loss of use claims are commonly denied by insurance companies.
How is fault determined in a Loss of Use claim?
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In a loss of use claim for a motor vehicle, fault is usually determined by the officer investigating the collision, who will gather testimony from all drivers involved, witnesses, and any available surveillance footage. If you disagree with the liability decision of the officer, you can dispute it with compelling evidence, such as additional testimony or contradictory evidence. The at-fault party’s insurance company will compensate you for your losses, including loss of use, if you were not at fault for the collision. Loss of Use claims can be filed against the at-fault party’s insurance company when you cannot drive your car after an accident because it is in the shop. The defendant’s insurance company will then rent a car for you that is comparable to the one you usually drive.
How do I negotiate a Loss of Use claim with an insurance company after a car accident?
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To negotiate a Loss of Use claim with an insurance company after a car accident, follow these steps:
- Gather all relevant documents, such as accident reports, comparable rental listings, and rental vehicle costs.
- File your claim in writing to ensure evidence of submission.
- Contact the defendant’s insurance company to find out how long your car will be in the shop and if they will rent a comparable car for you.
- If you use your car for work and cannot work due to the accident, file a loss of use claim that proves loss of income to be reimbursed by the insurance company.
Remember to remain organized and keep a record of all communication and documentation throughout the negotiation process.
What are the different types of transportation expenses covered by a loss of use claim?
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Loss of use claims after a car accident may cover the following types of expenses:
- Rental car or substitute transportation costs while your vehicle is being repaired
- Public transportation costs
- Rideshare costs; or
- Private transportation costs.
It is important to note that the amount of money that may be recovered from a loss of use claim depends on various factors, and insurance companies may deny claims that they think are unreasonable.