Loss of Use

Loss of use comes up in just about every motor vehicle collision case.

The collision happens and either your vehicle can be repaired or is a total loss. (If it can be repaired the discussion focuses on costs of repair and diminished value. If it’s a total loss, then the discussion is about fair market value.)

But in either scenario, there’s loss of use. Loss of use—from our perspective—starts from the day of the collision and ends when you either get your vehicle back from the shop or you purchase a substitute vehicle.

How is loss of use measured? Well, if you ask a claims adjuster it’s the cost of renting the least expensive car available for X days. That’s about one third right. (And two thirds wrong.)

The adjuster would be right that loss of use is calculated based on rental.

But would be wrong that it’s based on the least expensive rental or an arbitrary number of days.

Loss of use is actually measured by multiplying the rental rate for a vehicle like yours by the number of days that your vehicle is being repaired or it takes from date of collision until you obtain a replacement. (And you don’t have to rent anything in order to recover loss of use.)

(The case that supports all of this in Washington is called Groth v. Kushnivich. And in Oregon it’s Graf v. Don Rasmussen Co.)

So if you have a 2015 Porsche 911 Turbo S and you get into a wreck, your loss of use is $780 (plus $78 in tax) for each day you don’t have your car.

That adds up fast. Same thing with motorcycles where the usual per diem rate for renting is about $250.

And what happens if you have to drive your vehicle around with damage while waiting to have it repaired? In that case I think you should receive partial loss because your vehicle has some utility but just isn’t the same (in appearance and/or performance) as it was before the collision.