A car accident can be extremely disruptive to your life, even if no one is injured. If your car is severely damaged and in the shop for weeks, how are you going to get around? Get to work? Get the kids to school? There can be a real economic cost to losing the use of your car.
Enter Loss of Use auto insurance coverage. So, what is loss of use coverage for auto insurance? Let’s take a look at this important type of insurance coverage that could help you avoid financial disaster after an accident.
What Is Loss of Use Coverage for Auto Insurance?
Essentially, loss of use coverage kicks in when you can no longer drive your car due to an accident. It is used to help you stabilize your daily life and activities while your vehicle is repaired or replaced.
Many types of insurance offer this type of coverage, including homeowner’s insurance, which will help in paying for a place to live should your insured house become unlivable. Auto insurance loss of use works in a similar fashion to help cover the cost of another form of transportation should your car become unusable due to an accident.
Let’s review how loss of use coverage can protect you.
Car Insurance and Loss of Use Coverage
For auto insurance, loss of use coverage essentially means that your insurance company will provide for rental car reimbursement should your car be unusable due to an accident. If your car must be in the repair shop for weeks and you need a vehicle for your daily commute, to get kids to school, or for other responsibilities, loss off use coverage can be a big help.
You must explicitly choose loss of use coverage as it is not mandatory and not automatic. Once you have the coverage, and should you have an accident, you will enter the claims process. Because you have loss of use coverage, your insurance company will cover the cost of replacement transportation, usually a rental car.
There are limits though, so let’s examine those.
What are the Limits on Loss of Use Coverage?
Typically, insurance companies will have specific limits on how much they will pay out for loss of use coverage. Limits can range from a cap on the number of days you are allowed to rent a car for reimbursement or on how much can be spent per day.
In addition, you must be reasonable in your choice of a replacement car. If you drive and insure an older Honda, don’t expect the insurance company to approve your replacement rental of a brand new sports car.
Do You Need Loss of Use Coverage?
As with most things regarding insurance, the choices you make are unique to your own situation. If you rely heavily on your car and will be suffering hardship if it is unavailable to you, you should consider adding loss of use coverage to your auto insurance policy.
And when you’re ready, the best way to get the best rate for your situation is to shop around. Using our simple form, you can receive quotes from major carriers and find coverage that’s right for you. InsuranceWins makes it fast and easy to find affordable car insurance for everyone.