STATE OF CONNECTICUT
INSURANCE DEPARTMENT

It has come to my attention that unless a claimant incurs rental expense, many insurers fail to consider compensation for loss of use when determining the sums payable for which an insured is legally liable when settling an automobile property damage claim.

The right of a third party claimant to be compensated for loss of use was clearly annunciated in Connecticut in Anderson vs Gengras Motors, Inc., 141 Conn. 688 (1954). In that case, the court held that the plaintiff may "recover the value of (the vehicle's) use while he is necessarily deprived of it."

A third party claimant may recover compensation for loss of use, regardless of whether he has incurred a rental expense.

The practice of failing to consider compensation for loss of use, when adjusting third party automobile property damage claims in which liability has become reasonably clear, could constitute violation of Section 38-61(6) entitled "unfair claim settlement practices" inasmuch as said practice does not constitute a fair and equitable settlement of claims.

Please review the claim procedures with your personnel to be certain that they comply with the intent of the law.