Question: My car was damaged in an automobile accident. Do I get a rental car? Do I get loss of use? What do I get?
All good readers of this blog know that you are entitled to a rental car if your car is damaged from a crash under two circumstances. First, if you have rental coverage on your auto insurance policy, your insurance company will pay for a rental car. Let’s say your coverage is $600. That typically means your insurance company will pay $20 per day for up to 30 days. Although, read your policy carefully because I saw one that paid $30 per day for up to $20 days. What does this not mean? It does not mean that they will pay you $600 and you can go rent a Corvette for a week!
Second, if the other person was at fault, their insurance will pay for you to have a rental car. Most insurance companies will only reimburse you. In this case, they will pay for a similar car to what you had. This does not mean that they will pay for an upgrade, but rather similar. They will not pay for the extra insurance, and if you have insurance, your insurance will cover you in a rental car in most situations. However, note that the insurance company may owe you for a similar car but will not tell you that. Rather, the adjuster will try to get you into a small car so that they can save the money.
But what about loss of use? This is pretty easy. If you were not at fault, the other person’s insurance is going to either pay for a rental car or loss of use. In other words, you cannot collect both. However, if you do not rent a car immediately, you can collect loss of use for the days you do not rent a car.
Example: Your accident is on day 1. On days 2 through 5, you do not rent a car. On day 6, you rent a car until day 10. You get 4 days of loss of use (days 2, 3, 4, and 5) and 5 days of rental (days 6, 7, 8, 9, and 10). Rental is basically what it costs to rent a similar car to what you had. If you had a luxury car, that is what you rent. If you had a Ford Focus, then you rent a compact car.
Loss of use is generally calculated at $20 per day. For some cars, it may be more. It is usually not less. But, the $20 per day number is a good number to start with.
In the above example, you get $80 plus your actual of out pocket rental expense. They will not pay for gas or the extra insurance (which most people do not need anyway), but they will pay for tax and fees.
So, there is a situation where you can get both – loss of use and rental. But, the adjuster will not volunteer this and will not offer to pay it. You probably have to fight with them to get paid loss of use.
And, remember, your insurance company will never pay loss of use!