Understanding Loss-of-Use Coverage in Auto Insurance

For millions of Americans, cars, trucks, vans and other automobiles represent integral parts of their daily lives. Commuting to work, transporting children to school and running errands are all regular tasks that often require a reliable motor vehicle. However, accidents, criminal activity, inclement weather and other unexpected circumstances can render an automobile temporarily inoperable. Fortunately, the right auto insurance policy can help you manage the financial ramifications of these situations.

What Is Loss-of-Use Coverage?

Loss-of-use coverage is a common fixture in many types of insurance policies, including homeowners, renters and auto insurance. Some auto policies may refer to it as “rental car coverage.” Regardless, this policy feature generally lives up to its name by helping motorists absorb and manage the losses and expenses associated with a temporary lack of access to their vehicle.

What Does It Cover?

By having this aspect of auto insurance, you may be positioned to receive crucial financial aid following various incidents that leave your car inoperable. For example, if you’re involved in an accident that requires you to take your vehicle to the shop for repairs, that doesn’t mean your other obligations cease. Fortunately, your auto insurance may render financial aid to help you rent a vehicle and generally maintain your everyday life without incurring exorbitant out-of-pocket costs. Additionally, in some cases, your loss-of-use coverage could help pay for expenses other than a rental vehicle, such as using public transportation while your car is being repaired.

Are There Exceptions?

In some cases, if you were the at-fault party in an accident, your insurance may decline to cover rentals or other loss-of-use expenses. Additionally, if your vehicle was declared a total loss, you’ll likely receive a lump sum to compensate you for your automobile. Should the claims process for a totaled vehicle be drawn out, insurers may offer loss-of-use compensation for that period.

We’re Here to Help

Contact Universal Insurance Agency in Dayton, Ohio, today to learn more about auto coverage and find the right policy.

This blog is intended for informational and educational use only. It is not exhaustive and should not be construed as legal advice. Please contact your insurance professional for further information.