Compensation for loss of use: Is it worth it?
If your car needs to be repaired after an accident that was not your fault, you can get a rental car – or you can apply for compensation for loss of use. Here you can read whether this is worthwhile for you and what the correct procedure is for applying for loss of use compensation.
Over 2 million accidents - and just as much uncertainty
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Read here what is important after a traffic accident as the injured party and what rights and obligations you have
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Overview
Short & sweet
There’s been a crash – what now? If you are not at fault for the traffic accident, the liability insurance of the person responsible for the accident is obliged to settle all accident-related costs. These include the workshop costs, the costs for a motor vehicle appraiser and possibly also a lawyer for traffic law. But it also covers the replacement value in the event of a total loss as well as the cost of a rental car for the duration of the repair or, alternatively, compensation for loss of use.
As a rule, the other party’s insurance company will initially offer you a rental car for the period of the breakdown. You must refuse this, only then can you claim loss of use. The amount of compensation you receive depends on your vehicle. The value is calculated using the so-called loss of use table and is only shown in the expert opinion.
Good to know:
In most cases, it is more profitable to choose loss of use over a replacement car, because the compensation amount is not tied to a specific purpose and you are free to decide what you want to do with the money after it has been paid out.
Be careful if the question of fault is unresolved or if you are partially at fault: you could possibly be left holding the bag for all or part of your damage. In such cases, it is advisable to consult an expert such as AMC Gutachten (phone 03335 / 605 98 07). We will be happy to advise you on the best course of action.
Definition: What is a loss of use?
Have you been involved in an accident through no fault of your own and now your car is no longer roadworthy and you have to travel to work by public transport? Then you are entitled to compensation for loss of use during the repair or replacement period. This is because the usability of a vehicle is a valuable asset. If this is lost, the damage incurred must be compensated by the opposing party’s liability insurance as part of the claims settlement.
FAQ - frequently asked questions
In order to receive compensation for loss of use, you must refuse the rental car offered by the other party’s liability insurer. You can then apply for compensation for loss of use by writing to the insurance company – or you can have this done by an experienced motor vehicle expert who will take care of all the formalities for you.
In short, there is no fixed duration for the compensation for loss of use – it mainly depends on how long it takes to replace your vehicle. In other words, how long it takes for it to be repaired in the workshop. As a rule, a downtime period of 14 days is assumed. If the repair takes longer, there is a risk of trouble from the other party’s insurance company. They can then refer to the principle of the duty to minimize damage, because as the injured party you are obliged to keep the damage as low as possible.
As the victim of an accident, you are entitled to a rental car or loss of use, i.e. compensation for loss of use, while your vehicle is being repaired. It is usually more financially viable to opt for loss of use.
Prerequisites for fictitious settlement
If you are considering making a claim for loss of use, you should briefly consider how you normally use your vehicle. This is because compensation for loss of use is only paid under two conditions: if there is both an intention to use the vehicle and an opportunity to use it. But what exactly does that mean?
Willingness to use
If you keep your car in the garage most of the time, you’re in a bad position when applying for loss of use. This is because in order to make a claim, you must be able to prove that you would actually use the vehicle if it wasn’t broken. For example, to get to work or to drive the children to school or the sports club. The planned trip to your – already booked – vacation also counts as intent to use.
Possibility of use
Of course, you will also have to prove that you can use the vehicle during the repair period. If you are at home with your leg in plaster or have had your driver’s license revoked due to traffic violations, this proof may be difficult. However, even if your partner, friends or relatives drive the car regularly, this counts as being able to use it.
How is the compensation for loss of use calculated?
After an accident, it is important for you to know how high the compensation for loss of use actually is in your case. Only then can you use reliable facts to decide whether you should opt for a rental car or apply for compensation for loss of use.
The loss of use table provides an initial indication (insurers and appraisers usually consult the Schwacke list: EurotaxSchwacke according to Sanden / Danner / Küppersbusch / Seifert / Kuhn), but it is not the sole factor for the amount of compensation.
Extravagant optional extras, for example, or the advanced age of your car also play an important role in the calculation. This is because if your car is more than five years old, it is automatically downgraded by one group in the table, which in turn results in lower daily rates for loss of use. The amount of possible compensation for loss of use is therefore not a calculation that you can just make with your fingers crossed.
The experienced vehicle experts and appraisers at AMC Gutachten have access to all relevant tables, are familiar with current case law and can therefore quickly and accurately calculate the value that applies to you. Simply contact us by e-mail(info@amc-gutachten.de) or telephone (03335 / 605 98 07).
Loss of use: application and sample letter
An informal letter to the opposing insurance company is sufficient to apply for compensation for loss of use. You just need to make sure that you include all the important information such as the repair amount and the time of the accident.
If you have commissioned vehicle appraisers from AMC Gutachten, we will of course take care of all the formalities and correspondence for you.
Ladies and Gentlemen,
I request payment of my claim from xx.xx.xxxx in accordance with the TÜV Süd report dated xx.xx.xxxx.
Repair sum: xx €
Depreciation: xx €
Loss of use: xx € (xx € loss of use class * repair duration x days)
Please transfer the full amount without deductions immediately to my account DExxxx at xx Bank.
Yours sincerely,
xxxx
Loss of use after a rear-end collision: What deadlines must be observed?
The entitlement to compensation begins at the time of the accident. As a rule, 14 days are allowed for the replacement of the vehicle; in the case of a repair, the actual duration of the workshop visit is taken into account. However, there are of course exceptions to these rules. Your motor vehicle expert (AMC Gutachten, phone 0173 / 154 37 47) knows all about them. If you have had a damage report drawn up, you have 3 days after receipt to decide whether you want to claim a rental car or loss of use.
Important! Observe the duty to minimize damage
As the injured party, you will be reimbursed for all accident-related costs, but you have a duty to mitigate the damage. This means that you must ensure that the damage is repaired as quickly as possible. In case of doubt, you may have to accept an emergency repair to at least make your vehicle roadworthy again.
Some liability insurers try to exploit this regulation to reduce the number of daily rates. The argument: the repair could have been carried out much more quickly with a little more effort on the part of the injured party. It is therefore advisable to collect evidence of telephone calls made in case the search for a garage takes longer.
Loss of use or rental car: Which is better?
As the injured party, you have the choice after a traffic accident whether you want the other party’s insurance company to provide you with a replacement car or whether you want to claim compensation for loss of use. Which option is better for you depends on several factors. In principle, you will always be offered a rental car first. You must refuse this in order to be able to claim compensation for loss of use.
You do not necessarily have to spend the money paid out as compensation for loss of use on cab rides or bus tickets; you can dispose of it as you wish. This is a decisive advantage over a replacement vehicle. Loss of use is also the safer option if the question of fault is unclear or the cause of the accident is disputed. This is because if you are found to be partially at fault and are already traveling with the rental car, the other party’s liability may refuse to pay and you may be left with part or even all of the rental car costs.
If you have selected loss of use, only the amount of the payout will change in case of doubt. If the course of the accident is disputed, it always makes sense to have an expert report drawn up. A qualified expert such as AMC Gutachten(info@amc-gutachten.de) can usually reconstruct the exact course of the accident based on the “damage” to the vehicle.
Loss of use table - what is it actually?
The table of loss of use is a list of over 38,000 vehicle models (motorcycles and cars), divided into groups from A to L, from the smallest car to the luxury sedan. These groups are determined by the age of the vehicle and the vehicle type. The list, also known as the Sanden-Danner-Küppersbusch table, is updated annually and is the first point of reference for courts and experts when considering the amount of loss of use.
It is supplemented by the EurotaxSchwacke list, usually referred to as the Schwacke list, which also provides daily usage values in addition to the residual value of used vehicles. For off-road vehicles, vans and other non-passenger cars, there is also the influx loss of use table from GPJ Verlag.
How much loss of use am I entitled to?
Different daily rates apply depending on the group and vehicle type. It starts in Group A with small cars such as the Fiat 500 or VW Up, for which 27 euros are paid per day.
The maximum rate for Group L vehicles such as the Mercedes-Benz SL or Porsche 911 Turbo is 175 euros per day.
Calculation example:
According to the table, an eight-year-old VW Passat TDI is assigned to group F, but since it is more than five years old, it slips into group E. A usage value of 38 euros per day is specified for this group. With a repair time of 11 days, the calculation is 11 x 38 euros = 418 euros compensation for loss of use.
Loss of use also for a motorcycle or motorhome?
If the vehicle involved in the accident is a motorcycle, you will first have discussions with the other party’s insurance company: They will claim that motorcycles are not used on an ongoing basis and that there is therefore no intention to use them. However, if you can prove that you ride the motorcycle to work every day, for example, you may well be entitled to loss of use. The daily rates for motorcycles are between 10 and 65 euros, depending on the engine power.
Recreational vehicles such as motorhomes or quads are also generally excluded from loss of use. However, if you were on your way to an already booked vacation with your motorhome and it is now in danger of being canceled, you are of course entitled to compensation for loss of use.
Compensation for loss of use, even if there is a second car?
Applying for compensation for loss of use also becomes problematic if you have a second car or a second vehicle in the garage. The insurance company will then most likely refuse to pay compensation for loss of use – unless the second car is permanently used by a family member and is therefore not available to you as a second vehicle.
Loss of use for commercial vehicles
Accident vehicles used for commercial purposes often become a bone of contention between the injured party and the insurance company. In order to be able to claim compensation for loss of use, you must be able to calculate and prove your claim precisely. This applies all the more if you also want to claim loss of profit. Often, instead of the loss of use, only the so-called holding costs are reimbursed. These are the costs incurred so that a company can provide a replacement vehicle from its own fleet.
Is there a loss of use for the bicycle?
Contrary to popular belief, a loss of use cannot only be claimed for motorized vehicles – in times of demotorization and sustainability debates, anything else would hardly be comprehensible.
So yes: If you can prove that you use your bike every day to get to work or to take the children to daycare, you are entitled to compensation for loss of use [LG Lübeck, 08.07.2011, 1 S 16/11]. This also applies if an alternative means of transportation (such as a car) is available. The only problem here is that there is no loss of use table for bicycles. In such cases, the amount of compensation must be determined on a case-by-case basis, for example by the court. This depends on how high the rental price for a bicycle is in the relevant region. This is usually between 6 and 10 euros.
However, if you were so badly injured in the accident that you are not physically able to ride your bike during the repair period or during the period for ordering a new bike, for example because you are in hospital, you are not entitled to compensation for loss of use as you are not able to use your bike as required.
Is there a loss of use for damage caused by game?
No, if your vehicle has been damaged in a wildlife accident (or by water damage), the compensation for use does not apply. However, if you have your own partially comprehensive insurance, these cases may be included in your insurance policy.
Compensation for loss of use after a total loss
If your vehicle has been totaled in an accident through no fault of your own, the question arises as to whether you want to replace it with a used car or a new one. In such a case, it makes sense to consult an expert from AMC Gutachten (phone 0173 / 154 37 47). He will document the total loss in his damage report so that you can provide the opposing insurance company with clear evidence of the need to replace the vehicle.
But what about compensation for loss of use? Of course, you are also entitled to this in the event of a total loss – for the duration of the replacement. This can take 14 days or longer, including all the formalities.
Don’t worry if it does take a little longer, case law has a clear tendency here: the Federal Court of Justice (BGH), for example, ruled in 2013 (case reference: VI ZR 363/11) that loss of use must also be paid for the period during which the damage is assessed. The Higher Regional Court (OLG) of Celle also ruled that the injured party may wait for an expert opinion and then has up to three days to consider the matter (AZ: 5 U 159/13). According to the OLG, the 14-day replacement period, which is assumed to be standard, only starts then and not at the time of the accident.
This deadline is also difficult to meet when buying a new car, as the order deadlines are usually much longer. You should therefore have the dealer inform you in writing of the delivery date on which the car is to be handed over to you so that you can present it to the opposing insurance company.
Loss of use for self-repair
Repairs after an accident are usually carried out by a specialist garage, but what about loss of use if you want to repair the damage yourself? In fact, it will be difficult to enforce your claim with the insurer if there is no proof of repair, such as a workshop invoice. Many insurance companies will then refuse to pay.
So if you prefer to do your own work on your car, you should document everything down to the last detail: Take photos of the car before and after the repair. Collect invoices for spare parts and, if possible, have witnesses confirm that you carried out the repair yourself. This way, you still have a chance of receiving compensation for loss of use. Alternatively, AMC Gutachten will be happy to issue you with a repair confirmation.
Is a vehicle appraisal useful for applying for loss of use?
Insurance companies are commercial enterprises, and as such they are concerned with maximizing profits. This is why liability insurers regularly try to cut items or reduce the claim amount when settling claims. The duration of the compensation for loss of use is often affected by reductions. And often attempts are also made to push the accident vehicle into a more favorable group in the loss of use table.
These practices are best refuted by a damage report from a qualified motor vehicle expert. In case of doubt, your expert can also recommend a competent specialist lawyer for traffic law so that you really get the compensation you are entitled to.
Is a vehicle appraisal useful for applying for loss of use?
After an accident through no fault of your own, you should remain calm and level-headed and take care of the most important things first: Your safety and that of those around you. For everything else, you as the injured party can confidently rely on an appraiser, who will take care of the entire claims settlement for you – simply, carefree and safely. This way, you get your rights and the money you are entitled to without getting bogged down in disputes with the other party’s liability insurance.
Give us a call (phone 0173-154 37 47), we will be happy to help you!
Conclusion
Nerves are often on edge after a no-fault accident. Nevertheless, you should try to think about a few things calmly: How long will the repair take? Do I absolutely need a car during this time or can I get to my destination by public transport? Is it worthwhile for me to pay compensation for loss of use instead of a rental car?
The experts at AMC Gutachten will be happy to help you answer these questions at any time (WhatsApp to 0173 / 154 37 47 or call 03335 / 605 98 07 or email info@amc-gutachten.de). We ensure simple, worry-free and secure claims processing and keep you up to date at all times through your personal contact person. This means you won’t experience any nasty surprises, even in complicated cases.
