CALA CALA Rental Vehicle and Diminished Value Claims

Question 1

Under a standard auto policy, what coverage typically pays for a rental vehicle while the insured's car is being repaired after a covered loss?

Accepted Answer

Transportation expense or rental reimbursement coverage

Answer

Transportation expense or rental reimbursement coverage, usually an optional endorsement, pays for a substitute vehicle while the insured's car is repaired due to a covered loss.

Question 2

What does a 'per day / per occurrence' rental reimbursement limit mean?

Accepted Answer

The insurer pays a fixed daily rate up to a maximum total amount per claim

Answer

A per day / per occurrence limit (e.g., $40/day up to $1,200 per claim) caps both the daily rental reimbursement and the total amount payable under that coverage.

Question 3

Who is responsible for providing a rental vehicle when the insured's car is damaged by an at-fault third party?

Accepted Answer

The at-fault party or their liability insurer

Answer

When a third party is at fault, their liability insurer is responsible for the insured's transportation expenses, including a rental vehicle, as part of the damages owed.

Question 4

What is 'loss of use' in the context of an auto claim?

Accepted Answer

The cost of renting a vehicle comparable to the one being repaired or while a total loss is settled

Answer

Loss of use compensates the vehicle owner for the period they are without their vehicle due to a covered loss, typically measured by reasonable rental costs for a comparable substitute.

Question 5

When handling a total loss, until what point is the claimant generally entitled to rental vehicle compensation from the at-fault insurer?

Accepted Answer

Until the replacement vehicle is purchased or a reasonable time after the settlement offer is made

Answer

Rental entitlement on a total loss typically extends until the claimant receives the settlement payment and has a reasonable opportunity to purchase a replacement vehicle.

(CALA) Certified Automotive Loss Adjuster Practice Test

(CALA) Certified Automotive Loss Adjuster Practice Test

CALA CALA Rental Vehicle and Diminished Value Claims