Loss of use claim

pecunianonolet

Hi there,

A friend of mine was involved in an accident earlier this year driving his German registered and insured car in UK. The other driver is at fault and their insurance has accepted liability. The insurance has named a partner in Germany as the first point of contact to deal with the case due to the foreign registration and insurance. He is happy with this as he can deal with it in local language.

The car was after the accident in a driveable condition and driven back to Germany. In Germany a state certified surveyor examined the car and damage and a report of the established repair cost and repair time was created. A certified garage handled the repair and dealt with body shop work, etc.

The surveyor calculated next to the established repair cost also loss of value of 200 Euro and a loss of use of 43 Euro/day while the car is at the garage getting repaired. He told me that in Germany he has the choice to either take a courtesy car or to opt for the calculated loss of use per day, which he did as he didn't need a courtesy car during that time. The surveyor calculated that it takes 5 days for the repair. (This is assuming all parts, slots at the body shop etc. are immediately available). 

The actual time it took for all repairs was in the end 12 days as parts were not available and extensive paint work had to be carried out. The named insurance company in Germany, acting as a partner/on behalf of the UK insurance, has paid the entire repair cost (almost 6000 Euro, paid the surveyor cost of ca 1000 Euro and some axle alignment cost.

However, instead of 12 days x 43 Euros for loss of use the insurance only paid him for 5 days and cut down the rate to 30 Euro per day. The insurance claims that the daily rate in UK would be the equivalent of 30 Euros per day, which would be around £25 with current exchange rates. While in Germany the rates are regulated he is unsure how it is handled in the UK and asked me if I could help him, hence me asking here on behalf of him.

He has been made aware that because the accident happened in the UK, local law plays a part in this. He thinks this doesn't seem right and feels like the insurance is trying to lowball him avoiding to pay.

Long story short, he is totally in the dark what his legal position is getting the 516 Euro (12 x 43 Euro), respectively the outstanding 366 Euro as the insurance paid him 150 Euro.

The surveyor report and garage invoice have been sent directly to to insurance so evidence of the calculated amount per day and repair time is evident.

Thanks!

cw8825

If this happened in the uk. Uk law applies not German. 

The payment for loss of use would be limited to the cost of what a replacement car would be. 

Depending on the car he has it may well be that he has been paid for 12 dats

Car_54

You said "he didn't need a courtesy car during that time.", so there was no actual loss, and anything he gets is a bonus.

DullGreyGuy

pecunianonolet said:

Hi there,

A friend of mine was involved in an accident earlier this year driving his German registered and insured car in UK. The other driver is at fault and their insurance has accepted liability. The insurance has named a partner in Germany as the first point of contact to deal with the case due to the foreign registration and insurance. He is happy with this as he can deal with it in local language.

The car was after the accident in a driveable condition and driven back to Germany. In Germany a state certified surveyor examined the car and damage and a report of the established repair cost and repair time was created. A certified garage handled the repair and dealt with body shop work, etc.

The surveyor calculated next to the established repair cost also loss of value of 200 Euro and a loss of use of 43 Euro/day while the car is at the garage getting repaired. He told me that in Germany he has the choice to either take a courtesy car or to opt for the calculated loss of use per day, which he did as he didn't need a courtesy car during that time. The surveyor calculated that it takes 5 days for the repair. (This is assuming all parts, slots at the body shop etc. are immediately available). 

The actual time it took for all repairs was in the end 12 days as parts were not available and extensive paint work had to be carried out. The named insurance company in Germany, acting as a partner/on behalf of the UK insurance, has paid the entire repair cost (almost 6000 Euro, paid the surveyor cost of ca 1000 Euro and some axle alignment cost.

However, instead of 12 days x 43 Euros for loss of use the insurance only paid him for 5 days and cut down the rate to 30 Euro per day. The insurance claims that the daily rate in UK would be the equivalent of 30 Euros per day, which would be around £25 with current exchange rates. While in Germany the rates are regulated he is unsure how it is handled in the UK and asked me if I could help him, hence me asking here on behalf of him.

He has been made aware that because the accident happened in the UK, local law plays a part in this. He thinks this doesn't seem right and feels like the insurance is trying to lowball him avoiding to pay.

Long story short, he is totally in the dark what his legal position is getting the 516 Euro (12 x 43 Euro), respectively the outstanding 366 Euro as the insurance paid him 150 Euro.

The surveyor report and garage invoice have been sent directly to to insurance so evidence of the calculated amount per day and repair time is evident.

Thanks!

If the car was drivable then why was it left at the garage whilst they awaited parts? The 5 days estimate would have included the "extensive painting". 

Courtesy cars are free in the UK, if one was available then there wouldn't be a valid claim for loss of use. The car shouldn't have gone in before the parts were available given the car was drivable. Getting 5 days loss of use therefore is generous. 

When I was in claims we paid LoU at £10 day, if you inflation link that it would now be circa £17.30. In 2015 an article by a well known law firm in the motor accident space put a value of £10-£15/day and indexing the higher value would put it at £20 in todays money. As such £25 sounds reasonable at a minimum and potentially generous. 

The law of the place where the incident happened determines the settlement from the third party, their own policy terms and legal jurisdiction named will determine any settlement from their own policy. 

pecunianonolet

cw8825 said:

If this happened in the uk. Uk law applies not German. 

The payment for loss of use would be limited to the cost of what a replacement car would be. 

Depending on the car he has it may well be that he has been paid for 12 dats

Ok, thanks for confirming UK law applies here. The cost was calculated with 43 Euro per day but you get to decide if you take a car or the daily rate instead in Germany. He's only been paid for 5 days, it's a Mazda CX3.

Car_54 said:

You said "he didn't need a courtesy car during that time.", so there was no actual loss, and anything he gets is a bonus.

Exactly, he didn't need the car but he was under the assumption that he can just opt for the money as this is the choice you've got he told me. He sent me this article from the German road side service, if you translate, it explains the process over there https://www.adac.de/rund-ums-fahrzeug/unfall-schaden-panne/unfall/nutzungsausfallentschaedigung/ and resulting entitlement. 

DullGreyGuy said:

pecunianonolet said:

Hi there,

A friend of mine was involved in an accident earlier this year driving his German registered and insured car in UK. The other driver is at fault and their insurance has accepted liability. The insurance has named a partner in Germany as the first point of contact to deal with the case due to the foreign registration and insurance. He is happy with this as he can deal with it in local language.

The car was after the accident in a driveable condition and driven back to Germany. In Germany a state certified surveyor examined the car and damage and a report of the established repair cost and repair time was created. A certified garage handled the repair and dealt with body shop work, etc.

The surveyor calculated next to the established repair cost also loss of value of 200 Euro and a loss of use of 43 Euro/day while the car is at the garage getting repaired. He told me that in Germany he has the choice to either take a courtesy car or to opt for the calculated loss of use per day, which he did as he didn't need a courtesy car during that time. The surveyor calculated that it takes 5 days for the repair. (This is assuming all parts, slots at the body shop etc. are immediately available). 

The actual time it took for all repairs was in the end 12 days as parts were not available and extensive paint work had to be carried out. The named insurance company in Germany, acting as a partner/on behalf of the UK insurance, has paid the entire repair cost (almost 6000 Euro, paid the surveyor cost of ca 1000 Euro and some axle alignment cost.

However, instead of 12 days x 43 Euros for loss of use the insurance only paid him for 5 days and cut down the rate to 30 Euro per day. The insurance claims that the daily rate in UK would be the equivalent of 30 Euros per day, which would be around £25 with current exchange rates. While in Germany the rates are regulated he is unsure how it is handled in the UK and asked me if I could help him, hence me asking here on behalf of him.

He has been made aware that because the accident happened in the UK, local law plays a part in this. He thinks this doesn't seem right and feels like the insurance is trying to lowball him avoiding to pay.

Long story short, he is totally in the dark what his legal position is getting the 516 Euro (12 x 43 Euro), respectively the outstanding 366 Euro as the insurance paid him 150 Euro.

The surveyor report and garage invoice have been sent directly to to insurance so evidence of the calculated amount per day and repair time is evident.

Thanks!

If the car was drivable then why was it left at the garage whilst they awaited parts? The 5 days estimate would have included the "extensive painting". 

Courtesy cars are free in the UK, if one was available then there wouldn't be a valid claim for loss of use. The car shouldn't have gone in before the parts were available given the car was drivable. Getting 5 days loss of use therefore is generous. 

When I was in claims we paid LoU at £10 day, if you inflation link that it would now be circa £17.30. In 2015 an article by a well known law firm in the motor accident space put a value of £10-£15/day and indexing the higher value would put it at £20 in todays money. As such £25 sounds reasonable at a minimum and potentially generous. 

The law of the place where the incident happened determines the settlement from the third party, their own policy terms and legal jurisdiction named will determine any settlement from their own policy. 

I don't know the exact detail but based on what I was told by him is that he made an appointment with the garage of his choice in Germany and the surveyor travelled to the garage to examine the car. He then got his annual service done and picked up the car again after.

A week later when the report was available the garage told him to bring in the car. They then ordered the parts, after the repair contract was signed and arranged a date with the body shop and started to take things apart. He needed one full side painted including 2 doors, a complete new mirror, new alloys, etc. done. He told me that it is totally normal that a garage starts working on a car while parts are on order so things can happen in parallel, however, if the parts are delivered late from the manufacturers warehouse this isn't something the garage is liable for as it is out of their control.

I am surprised that LuU is not better regulated in the UK and that such small sums are paid and that there doesn't seem to be a transparent calculation procedure. (Never been in such a situation myself so no clue really). 

Anyhow, I'll pass the info on to him. He already said he might get a solicitor on the case anyhow. I feel sorry for him that he's got so much trouble now after what was supposed to be a nice holiday and visit. 

Mildly_Miffed

I'm not convinced UK law does apply to the loss-of-use payment.

The collision happened in the UK, but the car was driveable while here.
The loss-of-use arose back in Germany, and the insurance contract is under German law.

The question comes over what the UK insurer of the other car will pay to the German insurer. But that's the German insurer's problem, not necessarily the policyholder's. However in the UK (and I have no idea if German insurance works the same way as UK), if the insurer remains out of pocket, then it's regarded as an at-fault claim, so insisting on the higher loss-of-use payment may result in costing more over the long term.

The actual loss falls under two headings...

1. The number of days. He was without the car for 12 days, but he's being paid for four days. The rate is irrelevant to whether the additional eight days are due. That's entirely down to the Ts & Cs of his German insurance - the extra delay is not the fault of either insurer.

2. The daily rate. He think it should be €43/day, he's being paid €30/day. That's a question of whether the UK or German rate should be paid. He incurred the inconvenience in Germany, but it's ultimately being reimbursed by the party at fault, the UK insurer.

One thing's for sure, legals will quickly outweigh the difference. Pragmatism suggests this is a "swallow it and grumble" situation.

XRS200

Mildly, I read it that the LoU was an uninsured loss.  So legal liability applies - don't think the German insurance contract is relevant.

Mildly_Miffed

XRS200 said:

Mildly, I read it that the LoU was an uninsured loss.  So legal liability applies - don't think the German insurance contract is relevant.

Except it's not. The OP's lost nothing, because he didn't need to use the car.
This is just a way of bribing incentivising people not to hire cars they don't need.

XRS200

Mildly_Miffed said:

XRS200 said:

Mildly, I read it that the LoU was an uninsured loss.  So legal liability applies - don't think the German insurance contract is relevant.

Except it's not. The OP's lost nothing, because he didn't need to use the car.
This is just a way of bribing incentivising people not to hire cars they don't need.

A view many would take.  Still don't think German insurance contract is relevant

pecunianonolet

Mildly_Miffed said:

I'm not convinced UK law does apply to the loss-of-use payment.

The collision happened in the UK, but the car was driveable while here.
The loss-of-use arose back in Germany, and the insurance contract is under German law.

The question comes over what the UK insurer of the other car will pay to the German insurer. But that's the German insurer's problem, not necessarily the policyholder's. However in the UK (and I have no idea if German insurance works the same way as UK), if the insurer remains out of pocket, then it's regarded as an at-fault claim, so insisting on the higher loss-of-use payment may result in costing more over the long term.

The actual loss falls under two headings...

1. The number of days. He was without the car for 12 days, but he's being paid for four days. The rate is irrelevant to whether the additional eight days are due. That's entirely down to the Ts & Cs of his German insurance - the extra delay is not the fault of either insurer.

2. The daily rate. He think it should be €43/day, he's being paid €30/day. That's a question of whether the UK or German rate should be paid. He incurred the inconvenience in Germany, but it's ultimately being reimbursed by the party at fault, the UK insurer.

One thing's for sure, legals will quickly outweigh the difference. Pragmatism suggests this is a "swallow it and grumble" situation.

The German insurance doesn't need to be contacted, informed and basically doesn't care and won't do any work as regulating the issue falls with the at fault insurance when liability is accepted. At least that's how it is in Germany I've just been told. 

Mildly_Miffed said:

XRS200 said:

Mildly, I read it that the LoU was an uninsured loss.  So legal liability applies - don't think the German insurance contract is relevant.

Except it's not. The OP's lost nothing, because he didn't need to use the car.
This is just a way of bribing incentivising people not to hire cars they don't need.

Having just spoken with him, he explained that it is a legal right in Germany that you can either opt for the money or take a courtesy car. He said in some exceptional cases things are different but I stopped him there. The question if you need a car or not is irrelevant as you have a right to be compensated while your own car is out of use and that it can be either cash or the cash equivalent when you opt for the car. 

He explained that rates are regulated and used by all surveyors and insurance companies and are based on type of car, age, etc. Interesting is that in the case of a courtesy car it is regulated in the same way that if you take that option you are entitled to a car one class below of your own. I guess this is regulated in a similar way and that such cars are usually cars the garage/dealer owns. He said they can give you any car they want, as long as it meets the lower end category. The garage claims the rate for giving out the car directly from the insurance based on the assessed category together with the repair bill as long as you signed the act of assignment so that you don't have to deal with any monies yourself. 

He said he has legal claims insurance so might take it to a solicitor if he can't get anywhere with his German insurance contact person. 

He asked if there are any source of how LoU rates are assessed or regulated in the UK or if this is done on a case by case basis by courts or if you are at the mercy of the at fault drivers insurance?

He said I should pass on thanks to all contributors :-)

DullGreyGuy

pecunianonolet said:
I don't know the exact detail but based on what I was told by him is that he made an appointment with the garage of his choice in Germany and the surveyor travelled to the garage to examine the car. He then got his annual service done and picked up the car again after. 

A week later when the report was available the garage told him to bring in the car. They then ordered the parts, after the repair contract was signed and arranged a date with the body shop and started to take things apart. He needed one full side painted including 2 doors, a complete new mirror, new alloys, etc. done. He told me that it is totally normal that a garage starts working on a car while parts are on order so things can happen in parallel, however, if the parts are delivered late from the manufacturers warehouse this isn't something the garage is liable for as it is out of their control.

I am surprised that LuU is not better regulated in the UK and that such small sums are paid and that there doesn't seem to be a transparent calculation procedure. (Never been in such a situation myself so no clue really). 

Anyhow, I'll pass the info on to him. He already said he might get a solicitor on the case anyhow. I feel sorry for him that he's got so much trouble now after what was supposed to be a nice holiday and visit. 

In the UK a car accident generally falls under the tort of negligence which is part of the common law system. These are not codified laws like you get in the civil system (which Germany has) but decisions made in prior cases which creates precedence which is binding on lower courts. 

Civil Law has the advantage that you can go to a book and read up exactly how the matter should be dealt with but it also has the disadvantage that the book needs to go through a lengthy parliamentary process for the book to be updated. Likewise if you go to the book and the book doesn't say anything about the matter you've got a problem. 

Common law adapts organically, there is no book you can go to but principles are well established on many things. The courts can apply the logic and either apply it, evolve it or differentiate from it which means things can move on without politicians having to write/rewrite laws and there is no circumstance the courts can't deal with because there is no book for a situation not to be in. 

There is a few exceptions to the above where the parliament have decided to pass a law which then overrides common law. Most recently we had the Whiplash Reforms which changed injuries being valued at an inflation adjusted version of previous settlements as seen fit by the judge to a fixed table that you can look up and have a set value. 

There is no regulations on LoU, we simply have previous court cases on what judges then considered reasonable adjusted for inflation. LoU can be different for different people too, in one case I had the person required a highly modified vehicle for their disability. We tried to source a hire car for them but none had the mods they required. As there was no other option and because they basically became housebound for the duration of the repairs we did pay them notably more. For anyone else if they needed a car, licensed taxi, refrigerated van we can get all of those easily, and so not having a replacement vehicle is a choice and is why the settlement is fairly low. 

Their claim is under the £10,000 limit for Small Track so where they to instruct a solicitor it would be at their own expense. Given the differences in monies being talked about the legal advice would cost them more than the amount they are claiming for and I doubt they'd get that anyway. 

It used to be the norm to book the car in and get the parts in parallel but then Covid happened and perfectly drivable cars were being held in garages for months whilst everyone was struggling to get parts. Even before covid increasing the duration by 150% because of parts delay wouldn't have been acceptable, it's even more so now that we know of supply problems. 

If LoU is so codified in Germany may be the additional days should be paid by his choice of garage as its was them that was wrong about being able to do things in parallel and caused additional his loss.