A few months ago, I was (ironically) walking into an auto parts store when a limousine pulled me over. Unfortunately, my tiny Miata couldn’t stop in time:
Luckily, everyone was fine and there were no teens in the limo who didn’t make it to prom. Atlanta police officially quoted the other driver as guilty, so after we all went our separate ways, I mentally braced myself for some verbal skirmish with their insurance company.
Fortunately, the other driver had a State Farm, they are quite polite and easy to deal with. After a friendly young representative explained to me everything that I was entitled to, I had a question:
“What about compensation for loss of useability?”
There was a pause, as if I had just asked for a rare vintage wine at a fancy restaurant, and they had to remember if a bottle was hiding in the cellar.
The point is, I don’t blame the representative for taking him by surprise. Mostly only lawyers and insurance nerds like me know what a LOU is even is an…
But this definitely worth knowing as it can with ease will bring you an extra few hundred dollars after the next fold of the wings. In this case State farm The representative pecked at the keyboard for a minute and came back to me with the good news:
“Okay sir, if you lose your ability to use, you are entitled to an additional $ 475.”
If you are the victim of a car accident and have lost the ability to use your car for a while, you are almost certainly eligible for an additional compensation payment for the loss of use.
More details: Fender Bender? How to deal with a minor car accident
As for cars, auto-Lost Use Compensation is intended to cover the inconvenience / cost associated with losing access to your vehicle while it is in a workshop for repairs.
V theory, indemnification for inability to use must cover rental or public transportation costs. and Loss of income if you need your car to earn money (for example, driving for a ridesharing company).
In reality, however, most insurance companies will only pay compensation for non-use under strict rules. daily allowance. Cases can only be made for commercial vehicles such as taxis or trucks, but the rules regarding personal vehicles sometimes used for commercial purposes are unclear.
It doesn’t hurt to ask, though!
More details: Can i rent a car with a debit card? It depends
Simply put, you are usually eligible for compensation for loss of ability to use if:
- You are entitled to rent a car.
- You decline it or the rental is not available.
Magic words coming from your insurance company or Other the driver is a “rented car”.
This is what many do not know
If the insurance company offers you to rent a car, you can actually opt out and accept cash instead. That money won’t be as big as the cost of renting it, but it’s still something — and it’s called loss of use compensation.
If you are not sure if you need a rental car, you can rent a car on some days and per diem in case of loss of use on other days. Your designated insurance representative will Count it all up later when you return your vehicle and receive a lost-of-use check.
Here’s When You Are Eligible To Rent A Car After Reimbursement
Your eligibility to rent a car will depend on who is at fault for the accident:
- If the accident was caused by another driver. Yyou will be eligible for a rental car, covered by another driver’s insurance, as long as your car remains “unfit to drive” (more on this below).
- If the accident happened through your fault / no fault. You will only be eligible to rent a car if you have compensation for the rental car as part of your policy with your own Insurance Company.
The latter case highlights why paying rent refunds can be a good idea, even if you don’t intend to use the rent. I used to skip rent refunds because I thought I would be okay for a while without a car. After all, I work from home and have a bicycle to buy groceries.
But rent reimbursement coverage can still be helpful as you can often use it for rent. or instead of per diem for loss of use. To verify this, check your supplier’s car rental coverage terms.
How long has your car been considered “unfit to drive”?
I mentioned earlier that driver insurance will pay for your rental as long as your vehicle remains “unfit to drive”.
According to HG.orgif your car has any of the following:
- Damaged, cracked or missing mirrors.
- External headlights damaged, missing or misaligned.
- Reflectors damaged or missing.
- Damaged or silent horn.
- Curved hood.
- There are no bumpers.
- Body with uneven edges.
- Cracked windshield.
- Tires / wheels are out of alignment.
- Ineffective brakes.
Your car cannot be moved by law and you are entitled to rent a car until it is repaired.
How do I get compensation for lost use if you are eligible for a rental?
Once you or the other party’s insurance tells you that you are eligible for the lease, you can simply tell them that you would rather be compensated for the loss of use instead. This helps to know their loss compensation rate, which is usually a flat per diem.
Then you can decide which days you want to rent and which days you want to get cash.
Do you need to know exactly when you need rent versus cash?
In most cases, you do not have to make a decision on the spot. At Sovkhoz they gave me a special number where I could call the Enterprise, and advised me to arrange a lease any day I needed it, without haste. Then any days I didn’t there is rent, they will give me per diem. We’ve tabulated everything as soon as I get the car back.
The essence is as follows: once the provider offers you a lease, clearly state that you would like to be compensated for the loss of use for each day that you were eligible for the lease, but didn’t get one. Insurance companies won’t fight you about this because their daily subsistence allowance is usually much less than they would pay for a one-day rent.…
What is the amount of compensation for the loss of the ability to use usually price?
The state farm paid me $ 25 a day for the loss of the ability to use.
It may not sound like much, but it adds up quickly, especially if your vehicle has been legally banned for days, weeks, or months.
If you receive compensation for a loss of use, insurance companies usually want you to relocate. somewhat fast – you can’t just let your machine sit for a year and collect $ 9,000 in the LOU comp. Service providers usually say that you are eligible for a LOU if you receive your vehicle from the store within a “reasonable” time frame, perhaps one to two weeks.
Personally, I was so anxious to renovate my tiny little Miata that I delivered it to the store within an hour. State farm officially admit the guilt of their driver in the accident. My store was moving fast too – parts arrived the next day and I was back on the road three days later (thanks Adnan!).
But even if everything is on my the end moved forward with lightning speed, the whole process still took 19 days:
- 10 days to publish the police report.
- Another 6 days for the state farm to receive a certificate from another driver and take responsibility.
- 3 days for repair.
So for a bump stop, 19 days and $ 475 in lost use compensation can be considered minimal. If your next accident makes your car unusable for a month or more, you may be entitled to much more.
Here is a quick overview of automatic loss compensation and when it is applied:
- Lost Use Compensation covers the cost / inconvenience of losing the ability to use the vehicle until it is repaired.
- Generally speaking, if an insurance company offers you a rental car, you can opt out and receive compensation for the loss of use instead – usually paid at the daily subsistence rate for each day you not Car rent.
- You will be eligible for loss of use compensation for each day that your machine is “out of service,” which may require only a broken taillight or a protruding fender.
- The per diem rate for lost use can be as low as $ 25, but given that insurance situations can often take weeks, those per diems add up quickly.
The next time you or someone you care about gets into an accident, be sure to ask for indemnification as soon as the dust settles. Don’t leave more than $ 500 on the table!