Loss of Use

from Florida Truck News - Spring 2021

Q + A with Sarah Wellman

Loss of Use Damages: Experts Advise Getting to “Yes”

By David Purinton

When your life and business are on the road, accidents are a fact of life. If you have spent any amount of time in the trucking industry, you know this is true because you have had to handle damage claims as part of your experience. Even with all of your industry knowledge, it is possible that you are leaving money on the table. This money is found in “Loss of Use” damages, and you should recover it whenever your property is damaged by someone else. Because loss of use damages are not well known or understood, parties who have suffered property damage often do not know they are recoverable or do not know how to maximize them as part of your damage claim against a responsible party. Let’s say one of your well-trained drivers is on the highway. Another driver is not paying attention and hits your company tractor and trailer. Your tractor and trailer are both damaged and out of service for a week while you get them repaired. You present your claim to the other driver’s insurance company and they offer you the cost of repairs. You are made whole, right? No, you have not been, but they are counting on you not knowing that. You are entitled to loss of use as part of your damage claim against them. What is loss of use? It is money designed to compensate you for the lost use of your property. You were unable to use your tractor and trailer for a week while they were being repaired. This leaves a week that you lost the ability to use your property the way you wanted. The insurance company of the party that hit you is not going to offer you payment for loss of use. They are counting on you either not knowing that you should recover it or not knowing how to get them to pay it. The fact is, you did not get to use your property during the time it was out of service, and you are therefore entitled to recover the lost use of your property as part of your claim. Typically, loss of use is determined by identifying the fair market value of a replacement or rental during the time reasonably required for repairs to be completed. A common occurrence in pursuing your loss of use claim is that the other insurance company will tell you that you have other tractors/ trailers available, or they will say you didn’t have other jobs lined up that you lost revenue from because you couldn’t use this specific tractor and trailer. They may even say you have to show them “lost profits” to be able to recover your loss of use damage. They are trained to say “No” — you should arm yourself with the knowledge to get them to say “Yes.” Loss of use is an “intrinsic” loss, as the Colorado Supreme Court said in a case filed (PurCo v. Koenig). That means it is an inherent part your loss. If your property is damaged, you cannot use it while it is being repaired. The right to use it is the right to use it how and when you want, in its non-damaged condition. It does not depend on whether you have other vehicles or other jobs or whether you did or did not lose profits. It is dependent on whether you had property that was damaged that you can no longer use how and when you wanted. There is also a rule that says the party who damages your vehicle cannot get benefits to which you are entitled as part of your loss. This rule is called the “Collateral Source” rule. This rule dictates that the party responsible must pay for market value repairs, loss of use relative to the damaged tractor/trailer only and potentially other damages we have not discussed in this article. Insurance companies are in the business of saying “No”. That is okay — that is their business. Through court cases and the tenacity of a few who have pushed hard to recover loss of use, insurance companies are slowly learning that they are wrong. They cannot dictate to you their own terms for recovery. David Purinton is President of SDI, an FTA member.