How it works
The NAIC describes loss of use insurance as protection against losing the use of property because it was damaged or destroyed. For drivers, the cost is usually paid in one of two ways:
- By the at-fault driver's insurer. If another driver caused the crash, the Texas Department of Insurance says their insurer pays for a rental for the time it considers reasonable to repair your car. Delays because parts had to be ordered or more damage was found can extend that time. If your car is totaled, rental payments may stop a few days after the insurer tells you.
- By your own policy. If you caused the crash, or the damage came from something like hail or theft, your own coverage applies. Rental reimbursement, if you bought it, pays a set amount per day up to a maximum. Uninsured motorist coverage can pay for a rental when the at-fault driver had no insurance, in states where it covers vehicle damage.
Related terms
Frequently asked questions
Do I pay a deductible for a rental when another driver hit me?
Not on a claim against the other driver's insurer. The Texas Department of Insurance notes that deductibles do not apply to claims against another driver's insurance company.
Sources
- NAIC, Glossary of insurance terms definition of loss of use insurance
- Texas Department of Insurance, Auto insurance guide rental cars after a crash, total losses, deductibles on third-party claims
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