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  1. #1
    Join Date
    Jun 2011

    Default Billed for a Rental Car Loss of Use Charge After an Accident

    My question involves insurance law for the state of: California

    I got into a single vehicle accident in an exotic car rental from My insurance has fully paid out ~$16K worth of damages to the vehicle. However on the original rental contract, there is a $5k wreck fee associated with car rentals due to loss of use. Here is the relevant portion of that contract

    LOSS OF USE - In the event of any damage to a Vehicle requiring repair, a loss of use fee shall be charged. This fee is calculated as one (1) day's weekend rental fee per week the Vehicle is out of service up to one (1) month, after which the Wreck Fee applies, as set forth below.

    WRECK FEE - In the event of any damage to a Vehicle in excess of minor damage, as set forth below, as a result of accident or otherwise, the Client must pay a fee in the amount of $5000 if the Client is found to be at fault. This fee is NOT part of an insurance deductible, but instead a paid deposit to Club Sportiva for added Vehicle depreciation due to damage and inconvenience to other Clients during repairs. Club Sportiva also reserves the right to bill for loss of use if Vehicle "down time" exceeds a reasonable repair time.

    My insurance would not cover my liability for that fee, but has pointed out that they cannot legally charge me this according to California Civil Code 1936 section c). The current bill seems very vague about loss of use charges, but section c) and d) implies that they cannot legally charge me for liability beyond the repair of the vehicle. The only thing that I'm not sure about is in subsection 3) of section d), it states:

    (3) A claim against a renter resulting from damage or loss,
    excluding loss of use, to a rental vehicle shall be reasonably and
    rationally related to the actual loss incurred.

    I'm not sure what they mean by loss of use here and I'm not sure whether this means I am liable for this or not.

    Here is a link to the current civil code 1936

    Any help is much appreciated, thanks!

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