What Is a Loss of Use Claim? How Do You File One?
Last Updated on May 4, 2020
Filing car insurance claims can be very confusing, as there are so many different types of claims you can file. One type of car insurance claim you may not have heard of before is the loss of use claim. A loss of use claim is a claim for compensation for any period of time where you were not able to use your car. Here’s what you need to know about this type of insurance claim and how to file one.
Do I Qualify for a Loss of Use Claim?
If your car is damaged or totaled and you cannot use it for a period of time, you could qualify to file a loss of use claim. The loss of use claim is essentially meant to cover the cost of a rental car or other alternative transportation that you used during the time when your car was not available. This claim applies if the damaged car was one you were leasing or owned and it was your primary mode of transportation.
Every insurance company has rules regarding who can qualify for a loss of use claim. In almost all cases, you will not be able to qualify for a loss of use claim if you were found at fault in the accident. This may not be the case if you have collision coverage and your policy specifies that you can receive a payout if you were at fault in the accident.
It’s important to note that your loss of use claim has to be reasonable, otherwise it could get denied. The most common reason that loss of use claims are deemed unreasonable is for renting a car that is not comparable to the one that was damaged. If you rent a car that was far more expensive than the one you lost, your loss of use claim will not be approved.
How Much Can I Get for a Loss of Use Claim?
This varies depending on your circumstances. Generally, the loss of use claim will pay you the amount of money you spent on a rental car during the period of time when your car was damaged. If you used another form of transportation, like cabs or rideshare services, you will get a per diem amount to cover these transportation costs, which can be up to $40 per day. This depends on where you live and your transportation needs – you could receive higher compensation if you live in a spread-out city where transportation is more expensive, or if you have a job that requires extensive road travel.
How Do I File a Loss of Use Claim?
There is a standard procedure you should follow if you want to file an insurance claim after an accident. When you get into an accident, pull over to the side of the road so you are out of the way of traffic. If someone is injured or there is serious damage to the vehicle, call the police. A police report can be very helpful for filing an insurance claim later, particularly if you weren’t at fault. If you can, take pictures of any damage to the car on your phone, aiming to get photos from many different angles. If there were any witnesses nearby, ask for their contact information. You should also get the insurance information from the other party involved in the crash. Once you have made your way home from the accident, write down an account of everything that happened. This account will help the insurance adjusters get a better idea of what happened in your case.
When it’s time to file your claim, you’ll need to round up all the documents that are relevant to the accident. You’ll need to gather statements from any witnesses, as well as your own statement of what happened. You will also need to submit any police reports related to the accident. If you got your car repaired, you will need to submit the repair bill. To file the loss of use claim, you will need to provide documentation that your car was unfit to drive and that you had to spend additional money on transportation in the period following the accident. This means you’ll need to get a report detailing how your car was damaged and how long it was in the shop or a report with information on how the car was totaled. You will also need to provide receipts for the rental car or cabs you used to get around.
If you want to file a car insurance claim after an accident, make sure you do so right away. Most car insurance companies require you to file a claim within a certain period of time after the accident, or they will not pay out. The sooner you contact your insurance company, the more accurately they can process the claim, and the more likely you are to get the reimbursement you need for your vehicle.
Do All Car Insurance Policies Cover Loss of Use?
There are many types of car insurance policies that cover loss of use, but not all do. There are many basic liability policies that do not offer loss of use coverage. If you want loss of use coverage in your policy, make sure to specify that to your insurance agent when you are applying. If you aren’t sure whether or not you have this coverage, you can check your policy’s terms and conditions to see whether or not it is included.
If your insurance policy offers loss of use claims, it’s important to file one after an accident. The cost of a rental car or a cab can add up, but a loss of use claim will minimize that expense.
