Auto Insurance Loss Of Use: What Is It?

By Compuquotes Team on March 27th, 2008
Auto Insurance

There is a type of insurance that is available with your auto insurance policy that is called loss of use. Loss of use insurance pays for your rental car or other transportation when your vehicle is being fixed due to a collision or other claim on your insurance, such as theft.

Loss of use insurance isn't available from all insurance companies, but is a valuable resource in case you lose access to your vehicle.

You can lose access to your vehicle for any number of reasons such as a theft, vandalism, collision or other type of damage. Some insurance companies will also allow you to use your loss of use coverage in the event of a major breakdown of your vehicle, but this is quite uncommon.

If you rely on your vehicle for daily use, such as to get to and from work or to do your job, then loss of use insurance is a good investment. This insurance coverage will ensure that you are not without a vehicle if yours is damaged.

Loss of use insurance is not automatically added onto your auto insurance policy, it is an endorsement that you must ask your agent to add onto your insurance policy for you. Loss of use coverage isn't widely known about, because it is not expensive and doesn't make a lot of money for the insurance companies. In fact, it will only cost you a couple of dollars extra a month for this added coverage.

Imagine being without your vehicle for a week or two-this can seriously crimp your lifestyle, especially if you use your vehicle to get to and from work or use it to do your job. Some jobs require you to have a reliable vehicle as part of the job description, so being without a vehicle isn't really an option--if something happened to your vehicle, you would have to rent a car to replace yours until it is fixed or replaced. If you had to pay for a rental vehicle for a week or two, it could really add, possibly in the thousands of dollars.

Typically, when you file a claim on your loss of use, you will be allowed to rent a vehicle that is equivalent to the car you own. We all know that there are several levels of vehicles to choose from when you rent a car, and if you are renting a car with your loss of use, you can usually get a car that is in the same class, for example, compact, mid size or luxury.

Many insurance companies will ask that you take a vehicle in a lesser class than the one you own, and in most cases, it's wise to do so, unless you require a specific type of vehicle for your job, for example a truck. If you require a specific vehicle for your job, then let your insurance company know and they will be able to help accommodate your needs.

Renting a car can be expensive and if you've lost your vehicle due to a collision, then you can make use of your loss of use insurance policy. If you aren't at fault in your collision or claim, then the other person's insurance will pay for your rental car because you have loss of use insurance.

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