The Limits on Recovery for “Loss of Use” of a Motor Vehicle
The loss of use of a vehicle following a car accident may cause a great deal of hardship and hassle, especially where the vehicle is a total loss. One principle of tort law is that a person damaged by the negligence of another should be made whole and placed in the same position he was in before suffering the loss. However, tort law also demands that a plaintiff prove his damages in order to recover. With these concepts in mind, the Massachusetts Appeals Court recently decided that an innocent owner whose motor vehicle is totaled in an accident who seeks to recover for “loss of use” of the motor vehicle from the at-fault driver, must substantiate actual damages with documentation of out-of-pocket expenses or costs incurred, and further that the owner is not entitled to reimbursement for the title and registration fees or the residual value of an inspection sticker.
Recent Case Study in Massachusetts
In the case before the court, the plaintiff received reimbursement from the at-fault driver’s insurance for the total loss of her vehicle. She then sought additional compensation from the insurer for the “loss of use” of her vehicle. The plaintiff claimed she had been damaged when she was deprived of the use of her vehicle, that the damage was the inability to use the vehicle, and that she established her damages by showing that she could not use the vehicle. The plaintiff also claimed that she was entitled to payment for the title and registration fees of the totaled vehicle and the residual value of her inspection sticker.
The Appeals Court rejected these arguments. The court noted that with respect to third-party claimants under a Massachusetts standard auto insurance policy, property damage is covered by Part 4 which provides that the insurer will pay “the amounts that the third party is legally entitled to collect for property damage through a court judgment or settlement,” including “the costs resulting from the loss of use of the damaged property.” The court interpreted the term “costs” in the policy according to its ordinary usage to mean an expense that is actually incurred. The court referred to a prior decision involving Part 4 of the standard policy requiring reimbursement of “applicable sales tax” in which it held that a plaintiff had to “provide to the insurer proof of the payment of sales tax on a replacement automobile.” The court found the policy language consistent with the Massachusetts statute governing the provisions that must be included within the standard policy. The Appeals Court also found that the plaintiff did not contend that the title and registration fees, and inspection sticker constituted property damage and further that the plaintiff did not point to any provision in the standard policy that would entitle her to recover those fees.
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