What Is Loss of Use in Auto Insurance?

After a car crash, most people think about repair costs or medical bills first. But what happens when your car is stuck in the shop and you’re left without a way to get to work, run errands, or take your kids to school? In Glendale, Arizona, loss of use car insurance is designed to fill that void. 

At The Law Offices of John Phebus, Glendale Criminal and Personal Injury Lawyer, we often hear from clients who had no idea they could get compensated for the days they were without a vehicle after someone else caused the accident. Arizona law gives you the right to seek compensation for the damage to your car and the time you couldn’t use it. This type of reimbursement, called “loss of use,” can include the cost of a rental vehicle or even the fair daily value of your car if a rental isn’t an appropriate match.

What Is Loss Of Use?

Loss of use is a type of property damage claim recognized in Arizona. It allows car accident victims to recover for the time they are deprived of their vehicle while it is undergoing repairs. This is based on the legal concept that when your personal property becomes unavailable because of someone else’s actions, you’re entitled to compensation for that lost utility. These damages are typically measured by the cost of renting a comparable vehicle or the daily value of the temporarily unusable car.

In simpler terms, if another driver causes a crash and your car is unusable for ten days, you can be compensated for that lost usage through loss of use car insurance.

Who Is Responsible for Covering the Costs?

The at-fault driver’s insurance company is generally responsible for covering loss of use damages. In Arizona, liability-based auto insurance means the driver who caused the crash, and their insurance provider, must pay for the consequences, including your inability to use your vehicle. That responsibility isn’t limited to just mechanical repairs or diminished value. It extends to the inconvenience and financial burden of being without reliable transportation.

This coverage is often part of the at-fault driver’s liability insurance, which may address your loss of use expenses even if you don’t carry the specific endorsement yourself.

What Does Loss of Use Insurance Cover?

Loss of use insurance typically covers rental car costs or the equivalent monetary value for each day your car is unusable. This might include:

• Daily rental car fees for a comparable vehicle.
• Public transportation or ride-sharing fees if rental is unavailable or impractical.
• Per diem value of your car when a rental substitute is not adequate.

Suppose your SUV is damaged, and the insurer only offers a compact car. You might argue that a compact doesn’t provide the same utility, and request the per diem market value for your vehicle instead. Arizona law acknowledges that loss of use car insurance compensation isn’t always one-size-fits-all. What matters is what it reasonably takes to compensate for being without your vehicle.

What Doesn’t It Cover?

Loss of use coverage does not include the cost of repairing your vehicle. That is considered a separate line item under property damage. It also won’t apply in the following situations:

• You were at fault for the accident.
• Your policy doesn’t include this type of coverage, and the other party isn’t liable.
• Your car was in the shop for non-accident-related reasons.

Additionally, if you delay repairs or extend the downtime without a valid reason, insurers may challenge the duration of your claim. The key is proving that the delay was solely due to the accident, not other circumstances. This is one of the areas where loss of use car insurance limitations can catch policyholders off guard.

How Do You Claim Loss of Use Compensation?

To pursue compensation for loss of use, you must provide solid documentation. Here’s what we recommend our clients gather:

• Proof of the accident (police report, photos).
• Repair shop estimates and timelines.
• Rental car receipts or daily vehicle value estimates.
• Communication with the at-fault driver’s insurance.

Timing also matters. You should submit your claim as soon as it’s clear how long your vehicle will be unavailable. Most insurers won’t pre-approve rental reimbursement, so you must be prepared with facts.

A well-documented loss of use car insurance claim will help support the rental costs and any reasonable transportation alternatives you had to rely on while your vehicle was being repaired.

How Do You Negotiate with the Insurance Company?

Negotiating for loss of use reimbursement can be frustrating. Insurance adjusters may attempt to:

• Offer a below-market daily rate for a rental.
• Refuse to reimburse rideshare costs.
• Dispute the repair timeline to reduce the days covered.

Your best leverage is well-organized, credible documentation. We also recommend comparing local rental rates for vehicles similar to yours. Don’t settle for an offer that doesn’t reflect the actual value of your loss.

Understanding how insurers calculate and justify these offers is key to pushing back effectively.

Seeking Legal Guidance for Your Claim

When the insurer isn’t playing fair, legal action may be necessary. At The Law Offices of John Phebus, Glendale Criminal and Personal Injury Lawyer, we step in when clients feel stonewalled or ignored. We’ve seen insurance carriers minimize valid claims or run out the clock.

Arizona allows for recovery of loss of use car insurance damages even when a rental isn’t obtained, so long as you can prove the deprivation of your vehicle caused hardship or inconvenience. That’s where a legal team can help prove loss and hold the insurer accountable.

Loss of Use vs. Rental Reimbursement:

Loss of Use

Loss of use refers to your right to receive compensation for the time you’re without your vehicle. This may include coverage for a comparable rental or a fair daily value if a rental isn’t appropriate for your situation. This can be based on the rental cost or a fair daily value if you opt not to rent a replacement.

It’s a damage claim usually filed through the at-fault party’s insurance. You do not need to carry special loss of use car insurance under your policy to be eligible for this type of reimbursement.

Rental Reimbursement

Rental reimbursement is an optional add-on to your own insurance policy. If you purchased this coverage, your insurer will pay for a rental car while your vehicle is being repaired, regardless of fault. It’s a convenient benefit, but limited in scope.

In Arizona, this coverage can be subject to surcharges. According to A.R.S. § 28-5810, rental agencies apply a five percent fee on contracts under 180 days, which can slightly increase out-of-pocket costs.

Both protections help when your vehicle is out of service, but differ in how they are accessed and who pays. That distinction matters when evaluating whether your loss of use car insurance claim should be made through your policy or the at-fault driver’s.

Talk to Our Glendale Attorneys About Your Loss of Use Car Insurance Claim

Insurance companies rarely make it easy to recover the compensation you deserve for loss of use car insurance. If your claim was denied or undervalued, you need an aggressive advocate.

At The Law Offices of John Phebus, Glendale Criminal and Personal Injury Lawyer, we know how to fight back under Arizona law. We’ll take on your claim, handle paperwork, deal with the insurance company, and help you get back behind the wheel—call (623) 847-7117 for a free consultation.

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