Loss of use coverage helps cover alternative transportation costs while your vehicle is being repaired after a covered claim. It is usually used for rental vehicles but can also be applied to public transit, taxis and ride-sharing services like Uber. This is optional coverage for both personal and commercial auto insurance. You may or may not have this coverage on your policy – check with your insurance broker if you’re not sure.
Over the last few years, supply chain issues have greatly impacted loss of use coverage in the following ways:
- Rental car shortage, particularly if you want the same or very similar model to your own vehicle.
- Scarcity of new vehicles.
- Longer repair times.
- Overall claim delays.
This means the cost of alternative transportation when you have a claim is increasing due to higher costs and longer claim resolution times. If you have loss of use coverage on your auto insurance policy, you may run out before your claim is resolved. We recommend reviewing the amount of loss of use coverage you have with your insurance broker to ensure it is adequate for your needs.
The supply chain issues continue to cause manufacturing and shipping delays for new vehicles and parts. Hopefully, the situation will improve over the next year. Speak to your broker if you have any questions or concerns about your coverage.