This article applies to Texas but Loss of Use is a very valid claim in most states and depends on the case law in that state.  Read on for more info about Texas but feel free to reach out if you are in another state but want to know more about a possible loss of use claim! Now on to the subject….

If you’ve been in a Texas car crash that wasn’t your fault, you have the right to recover damages for the loss of use of your vehicle.

The Texas Supreme Court established in Luna v. North Star Dodge Cars, Inc., 667 S.W.2d 115 (Tex. 1984) and in Mondragon v. Austin, 954 S.W.2d 191, 194 (Tex. App. – Austin 1997, review denied) that the rental value of a substitute car is indicative of the loss suffered. This means that you are entitled to recover the amount of money you would have had to pay to rent a vehicle that is of like quality and kind as your auto during the time that you were deprived of its use.

Unfortunately, insurance companies routinely try to avoid paying a fair amount for your loss of use damages, and my experience says they don’t routinely train adjusters on the case law method of calculating the amount of a loss of use claim.

Common Arguments Against Loss of Use

The four most common arguments from insurance companies are:

1) We only owe a discounted rental rate

2) We don’t owe for a like, kind, and quality rental

3) We only owe you loss of use up to the point we make an offer to settle your repair or total loss

4) We put you in a rental car, so there is no more loss of use.

Of course, none of these arguments are a defense to your true loss of use amount. 

I’ve researched this topic extensively, and neither me nor any of the attorneys I work with have uncovered any case law that supports the arguments used by insurance companies to deny valid claims.  If a carrier uses any of these arguments, demand that they put their denial in writing and explain how it is supported by case law.

The Economic Bully Stick

Insurance claims departments know that the amount of loss of use that they owe is usually not enough on its own to justify the victim filing suit, so they press their luck and maintain improper denials all the time.  I’ve written another article about this tactic that I call the “Economic Bully Stick”.  Check it out here.

Here’s a suggested course of action if you’re being beat up by the insurance company’s bully stick: 

1. Gather your evidence. This may include receipts for alternative transportation, expert testimony about the rental value of a substitute car, and repair or settlement timelines to establish the length of time that you were deprived the use of your vehicle.  You may also want to refer to number 4 and consult an expert (like me) right from the beginning.
2. Make a demand for your damages, and put a deadline on the demand which threatens to file a complaint with the department of insurance and file a suit if the carrier does not make a fair settlement offer within the deadline.
3. File a complaint with the department of insurance and begin preparing your small claims suit.
4. Consult with an expert and an attorney to get the help you need to document your loss for court, and then actually file a small claims suit.
5. Once suit is filed, you’ll most likely get an answer from the carrier that identifies the attorney that is handling the case. Your claim may settle without a trial if you maintain negotiations with the attorney while the trial is pending.  If they offer a settlement you can live with, you can dismiss the pending suit and sign a release.
6. If no settlement is made, you may be able to get a summary judgment on a loss of use claim since there is typically no genuine issue of material fact.

When All Else Fails

If negotiation fails, the only other option is to file a lawsuit to recover your damages.  In Texas, a person can sue for up to $20,000.00 in small claims court at the time of this article.  Additionally, with the help of an attorney, you have a high likelihood of obtaining a summary judgment in your favor. A summary judgment is granted when there are no disputed issues of material fact, and the party seeking the summary judgment is entitled to judgment as a matter of law (as is the case in Texas).  You’ll most likely win without ever having to go to a trial.

More About Summary Judgments

To obtain a summary judgment, you will need to present evidence that shows that you are entitled to recover your loss of use damages and how much those damages are. Evidence includes the relevant case law, the documented rental value of a substitute car (the same kind and quality as your car), as well as any evidence that shows the amount of time you were deprived of the use of your vehicle.  We  have a very simple, low cost and effective report to document loss of use in every applicable state and routinely provide evidence to owners and attorneys for losses such as these.

Ultimately, the key to successfully recovering loss of use damages in Texas is to be aggressive in your negotiations and be prepared to litigate the matter.  Insurance companies count on victims giving up and not suing.

Don’t give up.  Call my office if you need help finding an attorney or documenting the amount of loss of use that you are owed at (214) 227-2154 or send us an email using the form below and we will help you make sense of your potential loss of use claim.

Ask us about your loss of use below!