What is a Loss of Use Claim?

Over the last several years, the use of rideshare programs like Uber and Lyft have become increasingly popular to work for. As a result, we have seen an increase in the number of clients who drive for these programs. Many drivers for these platforms know that when they are involved in an accident, they must report the accident to Uber or Lyft. The Rideshare services will typically “suspend” account until the repairs to the driver’s vehicle have been completed. Unfortunately, during this time, the driver is unable to use most rental cars to drive for these platforms while their car is being repaired, resulting in a loss of income.

As such, if you are an Uber or Lyft driver and find yourself in the above situation due to an accident, without a vehicle, and unable to drive to earn a living, we may present a Loss of Use claim on your behalf. This claim compensates for the income you would’ve earned if your vehicle hadn’t been involved in an accident and your occupation depends on its use.

First, it’s important to understand the difference between a Loss of Use and a Lost Wage claim. A Loss of Use claim described above differs from a Lost Wage claim to the extent that a Lost Wage claim is a claim where you are unable to work due to the injuries you sustained in the accident. This claim requires a doctor’s note instructing you to remain out of work for a period.

The second important difference to note is that a Loss of Use claim is paid under the property damage coverage under an individual’s policy, while a Lost Wage claim relates directly to your injuries and is paid under the bodily injury coverage for the at-fault driver. The reimbursement for your lost wages is inclusive with your bodily injury settlement offer. This means you cannot claim both Lost Wages and Loss of Use for the same period of missed work. Generally, for a period of missed work, you must elect between either the Loss of Use claim or the Lost Wage claim.

As a claimant, it is vitally important to mitigate your damages if you are presenting a Loss of Use clam. For example, if you have the coverage to repair your vehicle under you own insurance policy, (an ability to repair) but you instead wish to wait for the other person’s policy to complete their investigation so you may use their policy, waiting for the adverse carrier to complete their assessment it may affect your ability to validly claim loss of use. For example, if it takes over a month from the accident date before your vehicle gets into a shop for repairs, all the while you not driving for the rideshare program and thus not making any money, the at-fault insurance company may not consider that first month since you did not mitigate your damages and could have repaired your vehicle using your own collision coverage. They could argue you didn’t mitigate damages since you could’ve used your own collision coverage.

Please note that Avis and Hertz have programs where people may rent a vehicle for the purpose of driving for these rideshare platforms. Avis/Hertz will charge a weekly rate for a rental, and we can submit invoices they provide for reimbursement. Therefore, if you depend on Uber or Lyft as your primary source of income, we would recommend trying one of these programs to reduce your losses. Doing so may allow you to keep earning income, even if your personal vehicle was damaged in an accident and is not drivable.

By Sarah Treuhaft, October 3, 2023