Prolonged Vehicle Repair After Accident: Insurer Obligated to Cover Expenses
After an accident, a vehicle gets fixed at the workshop, causing its owner to miss out on daily convenience. The question arises if the owner is entitled to compensation for the vehicle's unavailability duration, also known as loss of use compensation. The length of this compensation is another matter of concern. A court case resolved these issues.
When a vehicle gets damaged in an accident, the insurance might cover its loss of use while it's being repaired. Alternatively, they might pay for a rental car during this period.
A case presented before the Higher Regional Court (OLG) in Oldenburg further clarified these matters. The court decided that the insurer must pay for the loss of use, specifically, for 148 days, even if the driver initially availed of a rental car from the insurer and later returned it voluntarily (Case No.: 1 U 173/22).
Case particulars
A driver was involved in an accident with no fault of their own. The insurance was liable for 100% of the damages. However, it refused to provide loss of use compensation for 148 days.
The rationale provided by the insurance: They had covered the rental car costs originally, but since the aggrieved party voluntarily returned the vehicle, the intent to use it was not apparent. The case proceeded to court.
Why the insurance must pay
The OLG Oldenburg ruled in favor of the plaintiff. The man had valid reasons for returning the rental car. He was consistently hassled by the rental company to return the car, even during work hours. The rental car also lacked a trailer hitch, which he needed. As a result, he had to borrow vehicles from relatives.
After seeking legal advice, he learned that he could receive a flat-rate compensation for loss of use instead. Consequently, he returned the rental car. The plaintiff could prove that he still required a vehicle and had been borrowing one from family members.
Moreover, he submitted the repair order immediately after receiving the go-ahead. This demonstrated that the plaintiff had the intent to use the vehicle. Since the plaintiff had intended to use the vehicle, the insurer was obligated to pay for the full loss of use. Returning the rental car funded by the insurer did not obstruct the intent to use in this instance.
The insurer's decision to stop providing loss of use compensation for 148 days was challenged due to the driver renting a car but needing to return it due to inconvenience. Despite returning the rental car, the driver continued to require a vehicle and prove this by borrowing from relatives. Ultimately, the court ruled that the insurance company must cover the losses incurred from the car being unavailable for use during the repair period. The driver's car, which was a vital means of transportation, was under repair at the workshop due to the accident.
