STATE OF CONNECTICUT
INSURANCE DEPARTMENT
Bulletin No. CL-1
March 17, 1987
| TO: All Companies Licensed in the
State of Connecticut to Write Property and/or Casualty Insurance. RE: Automobile Property Damage Liability Claims ----Loss Of Use. |
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.
Peter W. Gillias
Insurance Commissioner
