Loss of Use: provide a rental while the car is being repaired

Arizona law requires the adverse insurance company to provide a replacement – or money for a replacement – due to ongoing loss of use.  However, they will often try to save money by giving you a rental vehicle that is not equal to the car being repaired.  Do they know the law?  Yes, of course they know the law.  But they also know that you are not likely to file suit over the difference.  Thus, this is an area of regular abuse of the position of power the adverse insurance company has when you need a vehicle to replace the one that is being repaired or evaluated and they know time is on their side.

Dimunition in Value: If repaired, the lost value on future resale due to damage they caused

Arizona law explicitly allows for someone to collect reimbursement for the difference in value to their vehicle based upon the repairs that were required due to the negligence of the other driver.  A car that has been repaired after an accident is worth less.  Determining the affect of the accident on the value of the car for future re-sale is critical in order to receive compensation for this loss.  Some states do not allow someone to get this money reimbursed, but Arizona does allow this loss and thus requires the adverse insurnace company to pay this loss.  If they fail to do so, that loss could be added to any future lawsuit, if necessary.

Here’s the law as we see it.*  Please be advised that as lawyers we got to advise you that this does not constitute legal advice, nor are we promising that the cases cited below are the most recent, most persuasive or most interesting.

Property damage claims for a negligently damaged vehicle include compensation for the cost of repair, residual diminution in fair market value, and loss of use. Farmers Ins. Co. v. R.B.L. Inv. Co., 138 Ariz. 562, 564-65, 675 P.2d 1381, 1383-84 (1983). Each element of “property damage” may be individually established and are distinguishable and separately compensable. Switz v. Allright Corp., 187 Ariz. 496, 499, 930 P.2d 1010, 1013 (Ariz.App. 1997). The victim is entitled to the reasonable rental value whether or not he/she actually rents a vehicle. Arizona courts follow the Restatement unless there is specific case law or statutory authority to the contrary. Aztlan Lodge No. 1 v. Ruffner, 155 Ariz. 163, 745 P.2d 611 (1987). Arizona follows the Restatement (Second) of Torts § 928(b). Farmers Insurance Company of Arizona v. R.B.L. Investment Co., 138 Ariz. 562, 675 P.2d 1381 (App. 1983). The Court of Appeals stated in R.B.L. Investment Co.:

“Where plaintiff has a claim for rental value or other loss of use. In cases where the plaintiff’s claim is one for the loss of use of his property, the rental value of the property during the period in which the plaintiff was deprived of it is often one element of damages he is allowed to recover. If his automobile is damaged and he loses the use of it for a month, he may be entitled to its rental value or the rental value of some substitute transportation. . . .”

138 Ariz. at 565, 675 P.2d at 1384 (citing Dobbs on Remedies, pp. 168-69) (emphasis added).

The relevant portions of the Restatement are §§ 927(d), 928(b), and 931(a). Section 927(d) allows for compensation for the conversion or destruction of property for “the loss of use not otherwise compensated.” Comment odiscusses the loss of use of chattel when it states:

On the other hand, as an alternative to interest during the period of detention, the damages can properly include an amount for expenses in procuring a necessary substitute or for the value of the use of a substitute until a replacement of the subject matter can be made, as stated in § 931, Comment c.

(emphasis added).

Section 928 deals with the harm to chattels. Section 928(b) allows for theloss of use. Comment b states:

In addition to damages for the diminution of the value of the subject matter or other similar elements of damages, the plaintiff is entitled to recover for any loss of which the defendant’s act is the legal cause, either because the plaintiff is unable to use the subject matter until it is repaired or replaced or otherwise. On the elements to be considered in determining the value of the use, see § 931.

Section 931 deals with detention or preventing use of land or chattels. Section 931(a) allows the victim to be compensated for “the value of the use during the period of detention or prevention or the value of the use of orthe amount paid for a substitute.” (emphasis added) Comment bexplains section 931(a) by stating:

The owner of the subject matter is entitled to recover as damages for the loss of the value of the use, at least the rental value of the chattel or land during the period of deprivation. This is true even though the owner in fact has suffered no harm through the deprivation, as when he was not using the subject matter at the time or had a substitute that he used without additional expense to him…

(emphasis added). Illustration 2 states:

A detains B’s automobile for a period of one month. The car was used merely for B’s pleasure and during this month B does not use another car. The rental value of the car is $50 for that period. B is entitled to damages of $50.

Illustration 3 states:

The same facts as in Illustration 2, except that at the time of the deprivation, B had put the car up for the winter, did not intend to use it and did not discover the loss until after it had been returned. The damages based upon rental value are not diminished by those facts.

Please also note in R.B.L. Investment Co., that even though the repairs took many months due to parts shipping delays, the entire loss of use time was an appropriate item of damage. 138 Ariz. at 565, 675 P.2d at 1384.