What is “loss of use” coverage in car insurance?

Car insurance can be tricky to invest in especially as there are so many choices to go with. While your best bet is always to go with comprehensive coverage, there are add-ons to your policy that you might want to consider and that are well worth the investment. One such add-on is loss of use coverage which can be a lifesaver for you if you want to remain mobile while your car undergoes repair or restoration. With that said, we will quickly go over why you should get it and what benefits it can bring you if you add it to your insurance policy. 

What is loss of use coverage, is what you are probably asking right now. Simply put it is an insurance claim that provides reimbursement for a rental vehicle following an accident with your vehicle. Most policies will already typically have this inclusion along with collision and comprehensive plans. The main benefit you get from this coverage is that it can temporarily help you maintain your standard of living while your vehicle is being repaired. This comes in handy especially since you are paying to insure an asset you can no longer use. The insurance company legally owes you a per diem amount towards a reasonable substitute for your loss of transportation.

This will heavily depend on the plan that you have, for basic liability policies this is often not included However, as motioned earlier, it is typically included with collision and comprehensive policies. It will cost you a few extra pesos a month but it will be worth the investment, especially for those who rely on a car for their daily commute.

In your policy, your insurer will give you a limited per diem amount of money to put towards transportation or a rental vehicle. Just make sure that you know how much you are allowed to spend before you proceed to rent a vehicle. 

Depending on the fine print of your policy, in most cases, you can. However, do note that you still be able to obtain compensation by multiplying the per diem by the number of days it will take to repair your vehicle. In other cases, you may file a claim based on the “measure of damage” you placed on the vehicle you borrowed

You can do this at any time after your accident with your vehicle. You don’t have to do it once it is in the shop. As long as your vehicle has had substantial enough damage to warrant a repair you can make a loss of use claim.

Unfortunately, if your car is a total loss then you won’t be able to file a loss of use claim. However, the insurance company will give you a check for the value of the lost vehicle.

Similar to how you would file other insurance claims, you will need an accident report, photos of your damaged vehicle, and estimates of the repair work for it. If your car is in the repair shop and more damage has been found you will also need to submit additional proof of damage. Once you have filed these documents with your insurance company it's on their end now to file the necessary paperwork and to inform you of your compensation for transportation.