In a recent case, a client was injured and their car significantly damaged when a woman disregarded a red traffic light and t-boned the client’s car. Shortly after the crash but before I was hired, the liability insurer for the negligent woman sent my client a letter which stated that the insurer would pay for the loss of use of their car while it was being repaired only if my client actually rented a replacement car, and that they would only pay a maximum of $19.99 per day regardless of the type of car that my client had been driving. This letter is a good illustration of the fact that just because an insurance company says that they don’t owe something doesn’t necessarily mean that it is true.
In Indiana, loss of use damages, which is compensation for not being able to use your car or truck because of collision damage, is measured as the reasonable daily rental value of the particular car or truck that was damaged. Thus, the reasonable rental value can vary widely depending upon the value of the vehicle that was damaged or destroyed. For example, the cost to rent a Porsche 911 Turbo as compared to a 15-year-old Chevy Malibu would be quite different, and so would compensation that is owed for loss of use.
Moreover, under Indiana law it does not matter whether a replacement vehicle is actually rented or not—loss of use damages are still legally owed. In a case that was decided by the Indiana Court of Appeals, an individual’s truck was damaged in an accident and was out of service for 20 days while it was being repaired. However, rather than rent a replacement vehicle, the individual used another car that he also owned. Although the liability insurer for the person who caused the crash claimed that they didn’t owe anything for loss of use because the truck owner had not actually rented a replacement vehicle, the Court ruled that loss of use damages were still owed because the owner did not have the use of that particular truck while it was being repaired. Therefore, whether he actually incurred an out of pocket cost in renting a replacement vehicle was irrelevant.
The Court also noted that if loss of use damages were owed only if a replacement vehicle was actually rented, people who couldn’t afford a rental car would be discriminated against, even though the loss of use of their vehicle may have a significant affect on their ability to get to work or carry on other important activities.
Despite this law, some insurance companies still try to take advantage of people by trying to pay them less than what is legally owed in a claim. So just because an insurance company says that they are only legally obligated to pay this or that, doesn’t necessarily make it true. If you feel that you are being taken advantage of by an insurance company, give me a call for a free consultation regarding your legal rights. Call me toll-free at 1-800-589-9466 or submit the simple form on the Contact Us page.
James F. Ludlow is an Indianapolis accident lawyer who is dedicated to helping injured people throughout Indiana and the United States. I offer clients an appropriate balance of aggressive but compassionate representation. My goal is to provide excellent service and to obtain the maximum financial recovery that is reasonable and fair for the particular injury that a client has sustained.