Motor Insurance - The Loss of Use Policy Exclusion
Insurance: Motor Insurance
In this article we will be looking at the "loss of use" exclusion clause in your motor insurance document.It specifies what alternative transport your insurance company will offer to you if your own vehicle is inoperative because of theft or accident. In most cases the answer is in the negative !!
Some insurers have a network of retained repair shops who will supply you with a courtesy car if one should be available. A small number of insurers have a car hire scheme as part of their policy whereby they will arrange a vehicle for you from their chosen car hire partner. However, most insurers do not offer either of these options.
Many insurers offer a rental car option to their comprehensive policies. The option is expensive and the cover offered is quite limited. You should decide if you feel it essential that you buy it. It is not an essential 'add on' for everybody. Ask yourself these questions:
If my vehicle was inoperative would I still be able to :
- get to work (by train, cycle, walk, bus)?
- get the children/grandchildren to school?
- go shopping
- go on holiday?
- follow my hobbies, social interests, sports etc?
If you could live without a vehicle for a few days, you do not need to buy this extra cover. If you can't then you should check that you have this cover.
Remember, if an accident is your fault or your car is stolen, you won't be able to recover any hire car costs from another person. You can't use a 'credit hire' company. You can't rely upon the prospect of a courtesy car from the repairers. So this additional cover becomes worthwhile for you.
Equally, if you do not want to use the recommended repairer of your insurance company, or your car is written off, your car hire extra cover will come to the rescue. Let us look at what you should expect from a typical policy.
You may only hire a car if yours is disabled for at least two days, but the maximum hire period is 14 days. If you need it for more than this you will have to pay the additional cost to the car hire firm. There has been many a disagreement between repairer, insurance company and vehicle owner when repairs have overrun often down to non-availability of parts and nobody wants to pay the extra car rental costs.
You can't have a hire car for a glass only or windscreen claim.
There is usually a maximum distance that the hire company will deliver a rental car so if you live away from the major cities and the hire company is some few miles away from you, be prepared for an extra charge if you arrange for them to deliver it to you. Can you get to their nearest depot yourself?
Your existing car insurance policy will cover the hire car as if it were your own car. That helps your insurance company to keep down the price of the hire car cover but if you have an accident in it, the claim will be on your policy.
The car can only be hired from the date your car goes in to be repaired if the damage to your car is such that it is still safe and legal to drive. If your vehicle is not safe to drive you can have the car from the day of the accident.
Policies could well define a maximum period of hire, such as 14 days. If your vehicle is restored prior to this date, you have to return the hire car as soon as you have your vehicle back.
The rental car supplied is likely to be a small, manual gearbox vehicle no more than a year or two old. If you require a larger model you will probably have to pay extra. If you desire an automatic efforts will be made to locate one for you within the price range specified in the policy. The hire car will usually come complete with a full tank of fuel. You must return it with a full tank. If you don't you will be charged by the hire company for a fill up. And they charge a ridiculously high price for fuel!
Some hire firms will want to collect your credit card number, if you have one, guarding against the possibility of needing to top up the fuel in your car or bumping it whilst out and about.
This article detailing the loss of use exclusion clause of a motor insurance policy was written by Terry Cod. He has several years of experience working as a claims adjuster with a number of UK insurance companies. His website www.instant-online-insurance.co.uk offers Over 70 holiday insurance.
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