Loss of Use (LOU) Insurance Claim for my Tesla’s 33-day repair

[2012MS85]

Question: Who has had an actual Loss of Use (LOU) claim involving an insurance company where you as the Tesla owner was NOT at fault, but lengthy repairs resulted in the at-fault party’s insurance company paying you for a LOU of your Tesla? If you were successful in your LOU claim, what daily rental rate was paid (or used in calculations if your Tesla was totaled)? And please also share what state your LOU claim was made since laws and liabilities vary from state to state.

Background: After Supercharging my Tesla Model S85 in October, a nice elderly lady I’ll call Louise backed into my parked Tesla causing minor damage (driver’s side headlight had a 1” scratch but was separated from its rear bracket; the plastic bumper was scratched and had a small separation/space from the headlight). Louise apologized and took 100% responsibility and said the fateful phrase, “Don’t worry, I have excellent insurance; I’m with State Farm.” Need I say more?

Long story short, my Tesla was fixed for $4k and looks like new, but it was in the repair shop for 33 days. State Farm admits that Iowa law requires them to pay me for LOU, but they only want to pay for the cost of “basic transportation” and they’ve not given me any offer yet. I’m seeking any specific experiences for those who have been in my shoes with lengthy repairs caused by someone else’s fault. Thanks in advance for anything you’re willing to share with the Tesla community that’ll help me and others who find themselves in this position.

 

[Tech_Guy]

id look at what a rental Tesla costs, for example in Los Angeles Enterprise Exotic division will rent you a Tesla Model S, I don't recall the rate because Tesla paid the bill on it at during a service appointment but it was not cheep, enterprise considers a Tesla an exotic car if that give you an idea!! Id give them a call and get a ballpark price!!! Maybe you can get them to send you a quote for a long term 33 day rental to forward on to State Farm

 

[2012MS85]

Tesla rentals are listed on Turo.com from $200 to $800 per day in the Chicago area, but the cost of said rental isn't my question because State Farm seems to want to pay me only for a Chevy Spark ("basic transportation). So I made this post seeking real-world experiences of other Tesla owners who HAVE BEEN PAID for LOU.

 

[kimberj]

And we wonder why insurance rates go up. Let it go man, don't have to exploit companies and people for honest mistakes.

 

[SDRick]

And we wonder why insurance rates go up. Let it go man, don't have to exploit companies and people for honest mistakes.

It's not quite that simple. Using this logic, the at fault insurance company would just need to replace the Tesla with basic transportation if the Tesla was totaled. This is what insurance is for and how it works. You have an expensive car, you have expensive premiums. I would think the other insurance company would cover loss up to the limits of the policy.

If someone is paying $2000 a month for their lease to drive a Tesla they are not going to be happy having it replaced with a Chevy spark.

 

[Rockster]

No offense, but I personally think LOU claims in this sort of situation are disingenuous. Your Tesla was not a source of income to you (e.g., it’s not a Turo rental) and their insurance paid for functionally equivalent transportation. At most, I’d say they also owe you for gasoline, which you would not have otherwise had to purchase.

 

[2012MS85]

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It's not quite that simple. Using this logic, the at fault insurance company would just need to replace the Tesla with basic transportation if the Tesla was totaled. This is what insurance is for and how it works. You have an expensive car, you have expensive premiums. I would think the other insurance company would cover loss up to the limits of the policy.

If someone is paying $2000 a month for their lease to drive a Tesla they are not going to be happy having it replaced with a Chevy spark.

Thanks @SDRick, for helping to point out to @kimberj that there are valid reasons for standing up to insurance companies that do their darn best to not pay what they legally owe. Mine was one of those cases where State Farm flat out lied to me (stating they could give me ANY rental car, and only later admitting it needed to be a similar vehicle) and tried at first to pay me 50% of my actual cost of repairing my Tesla. When I posted this, I was simply seeking evidence of real-life LOU payments from other Tesla owners who have been in my shoes. I didn't share (until now) how badly State Farm had behaved in handling my claim. To summarize my situation:

1. My Tesla is used in my limo business as a luxury "black car" that rents out at $100 per hour (professionally chauffeured). We carry a very expensive $1.5 million liability commercial insurance policy that costs $2,000 per year MORE THAN what it would cost on my personal Progressive Insurance policy. So when I lost the use of my Tesla for more than a month, there were real financial consequences. Instead of a straight-forward LOU claim, I could have gone after a "lost profits" claim and recovered even more. But I didn't feel like suing the nice little lady who caused my damage.

2. I actually received my Model 3 configuration invitation (I'm a day 1 reservation holder) while my Model S was in the repair shop, so I put my M3 order on hold (because I plan to sell my MS and replace it with the M3). Because I had no idea when I'd get my MS back (since the Tesla parts were back-ordered and delayed due to the CA fires), this caused me to lose out on being the first person in Iowa to receive my M3. Again, this is intangible, but it was a very real bummer.

3. I sent many detailed pictures of my damage to a Chicago-area Tesla-approved body shop I preferred to use, and they provided a $4,400 written repair estimate. And they estimated a 4-day repair time (which I knew from reading this TMC forum was never going to happen). I forwarded this estimate to State Farm and asked them to send me a $4,400 check. I said if they cut that check, I'd NOT be seeking anything further (i.e., no Loss of Use payment and no reimbursement for my cost of getting my Tesla from Iowa to Chicago, and back). This was a more than generous offer that I made because I wanted to avoid the massive hassle of repairing my Tesla at that time (last October). I knew the damage didn't "look bad" and I paid to have it professionally buffed out so it looked decent for now. I did this because I had a chauffeured booking the week after the accident to pick up Jay Leno for his comedy show in my town; I wasn't going to cancel or lose this awesome booking. Bottom line - State Farm refused my offer. They sent out their own adjuster and mailed me a check for $2,200 (HALF!).

4. I spent scores of hours and five written letters to State Farm regarding my claim. My assigned Claims Specialist went a month without returning my phone call or responding to my letters. In the end, they forced me to flat-bed tow my Tesla to the Chicago repair shop of THEIR choosing if I wanted them to pay, which I did in early December. They admitted they'd owe me for LOU (required by Iowa state law), and I repeated that I wanted to AVOID this whole mess that was going to end up costing State Farm much more. Their response was that they couldn't do anything more until their Chicago area body shop had my car. In the end, that body shop (Service King) did a great job with the repair, and it cost the same $4,400 as the original estimate. But it also took 33 days!

5. Long story short, after escalating this and finding an honest Claims Specialist, State Farm finally (yesterday) paid me $6,600 for LOU (33 days times $200 per day, which is the cheapest Turo rental of a Tesla in the Chicago area; the high end was a lofty $800 per day). So it had a happy, but very frustrating, ending. I would have preferred to make that same amount of money chauffeuring awesome clients like Jay Leno; offering a $4,400 discount to the ultimate buyer of my MS given the minor looking cosmetic damage; and have been driving my new M3 by now. (And State Farm could have saved over $7k, since they also paid $685 for that 145-mile flatbed tow to Chicago.)

So, for anyone wanting to know what HAS been paid by an insurance company for LOU on a Tesla, it's $200 per day. But if you want to collect that, be prepared for a long fight and know you'll need excellent documentation to support your claim ;o)

 

[2012MS85]

No offense, but I personally think LOU claims in this sort of situation are disingenuous. Your Tesla was not a source of income to you (e.g., it’s not a Turo rental) and their insurance paid for functionally equivalent transportation. At most, I’d say they also owe you for gasoline, which you would not have otherwise had to purchase.

No offense @Rockster, but you're incorrect. My Tesla is indeed a commercial vehicle with commercial insurance and commercial clients. See my previous post. Jay Leno very much enjoyed his ride in my Tesla (which is very much like his Tesla). And I do also offer it on Turo, at $500 per day. If my claim wasn't honest and accurate, I promise you State Farm never would have paid me $200/day. But they did.

 

[Rockster]

No offense @Rockster, but you're incorrect. My Tesla is indeed a commercial vehicle with commercial insurance and commercial clients. See my previous post. Jay Leno very much enjoyed his ride in my Tesla (which is very much like his Tesla). And I do also offer it on Turo, at $500 per day. If my claim wasn't honest and accurate, I promise you State Farm never would have paid me $200/day. But they did.

The error is mine.

I misread your post and didn’t pick up on the commercial use of your vehicle. My comment is restricted to individuals whose Tesla is a personal, non-commercial family car. In those cases, I think LOU claims are not warranted when a loaner car is provided.

 

[2012MS85]

The error is mine.

I misread your post and didn’t pick up on the commercial use of your vehicle. My comment is restricted to individuals whose Tesla is a personal, non-commercial family car. In those cases, I think LOU claims are not warranted when a loaner car is provided.

No worries at all. On my original post, I had not mentioned that I use my Tesla in my for-hire business (as I wasn't trying to make my post about me). I was really just seeking info on what a fair LOU would be, as I was trying to be more than fair with State Farm. When this claim had started, I made it clear to State Farm that I'd completely waive my right to LOU if they simply sent me the $4,400 check that equated to my exact repair cost. But the Claims Specialist forced me down a very different path I was trying to avoid. I could have made more money renting out my Tesla during my very busy holiday season, and State Farm could have saved a fortune (resulting, in theory, in lower insurance rates). Oh well. C'est la vie!

 

[drsaab]

Don’t forget to get diminished value for another 5-10% of vehicle value.

Carfax will kill the value of your future model S sale.

 

[2012MS85]

Don’t forget to get diminished value for another 5-10% of vehicle value.

Carfax will kill the value of your future model S sale.

While I may have legally had the right to diminished value, it wasn't worth drawing out my claim any longer. Four months of back and forth with SF Claims was enough for me. Heck, I may have actually IMPROVED the value of my Tesla because Tesla no longer sells their original 2012 headlights. So SF had to buy a new PAIR of very nice Xenon headlights ($2,500 just in parts) that shine a mile down the road. The new headlights are noticeably different, all for the better. And the scratch on my left front rim wouldn't buff out, so SF ordered a new rim and now I have a spare that fits perfectly in my 2012 frunk. (The newer MS has a smaller frunk that won't fit a spare.) So I'm all good.

 

[SDRick]

To me it does not matter if the car is for personal use or business use. Insurance is there to make you whole. No more, no less, up to the limits of the policy(s).

2012MS85, I'm surprised your own insurance company did not go after State Farm on your behalf and collect all you were due.

 

[2012MS85]

To me it does not matter if the car is for personal use or business use. Insurance is there to make you whole. No more, no less, up to the limits of the policy(s).

2012MS85, I'm surprised your own insurance company did not go after State Farm on your behalf and collect all you were due.

Agreed @SDRick. That was my whole point to State Farm, as paying me $19 per day for a Spark doesn't allow me to pick up clients like Jay Leno who is under contract to receive a Tesla; he's been in some crazy and tiny cars on his show...but never would he demote himself down to a Spark And I still didn't go after SF for the lost value of my commercial insurance (that is specifically tied to my Tesla's VIN). Personal insurance is different and more generous in that it'll cover any car I rent for personal use. But livery insurance must make filings with the Iowa DOT that show what VIN is covered as for-hire. So I knew I was a bit screwed no matter what.

On your second topic, that's unfortunately not how insurance companies operate. My company will never go after another insurance for things like LOU or diminished value; they will only recoup repair costs in my scenario. Your company will only do the minimum required by your policy. Since my policy covers two unique livery vehicles (a 14-passenger SUV Limo and a Tesla MS), I wasn't paying my company for "rental insurance" because no such similar vehicle can be rented in my area (other than from my business). And had I filed a claim with my company (I didn't, as I wanted to preserve my perfect history of zero claims to keep my rates down), then I also would have had to pay a $1,000 deductible (which I would have eventually got back via subrogation once it was determined I was 0% at fault). Also, since their are only four primary livery insurance companies, having even a single claim on my business history would likely blacklist me from one or two of those limited options, and most certainly add thousands per year in additional costs for my livery insurance. For example, my insurance cost per livery vehicle today (after 27 years in business) is about one-third of what I paid when I started in 1991 with no experience. A spotless history of zero loss runs equates to very large insurance savings.

Folks oftentimes make the false assumption that what you are legally allowed to recover (e.g., full repair costs, LOU, diminished value) is what the at-fault insured's company is going to voluntarily write you a check for. I can state with confidence, and from multiple experiences, that this just doesn't happen. Warren Buffett is filthy rich because Berkshire Hathaway's insurance companies (e.g., GEICO for personal; National Indemnity for livery) are well trained at slow-walking claims and low-balling offers on repairs. I speak from an actual experience in 1999 when my 1965 Classic Cadillac Limo (that I had just had stretched an extra 10-feet) was totaled by someone who blew a stop sign and hit my driver in his door at 40mph. Jerk driver was ticketed and 100% at fault. My newly-stretched limo should have been totaled, yet the Jerk's insurance company insisted it could be repaired (against my objection). They spent $25k trying to have a Cadillac Master Coachbuilder (Springfield) attempt the fix; they failed. When I got it back, the whole limo started vibrating at 44mph...not so cool to try explaining that to a wedding party going down the highway. So I immediately demanded my company (National Indemnity) total it and pay my $50,000 insured value, and they refused saying that since the Jerk's company had guaranteed the repair, I needed to keep working with them to "finish the repair" to pre-accident condition...which was never going to happen. Meanwhile, I'm running a business with lots of wedding parties who don't care about my insurance problems; they just want their 14-passenger Classic Cadillac that was booked months in advance.

So long story a little bit longer, in order to end this ordeal, I had to hire an attorney (at my cost of $8k in the end) and sue Jerk, his insurance company, and my insurance company. Almost a year later (after lots of my time wasted on depositions and discovery), the week before our court date, my company offered to settle for $48k, and the Jerk's company agreed to pay whatever my provable lost profits were (which I don't now recall). So I was kept whole on the lost profits, but my $50k investment in the Classic Cadillac left me $10k short ($48k offer minus $8k for my attorney). When I hired my attorney, he was 100% correct as he stated frankly to me, "You have zero chance of a full payment by your company (i.e., the $50k I expected because that was my insured value and I was NOT at fault). Yet you're going to pay me $200 per hour until said time that you realize you're going to have to settle for something less." And he ended up being spot on! National Indemnity saved $2k and got to keep their $48k invested and earning 15-20% annual returns until I saw the light. And had I gone to trial, it was going to cost me another $10k in legal fees and who knows what verdict because things are never black and white. By this time, further repairs to the drive shaft had fixed the rumble; yet the frame measurements were still off by more than an inch on one side because Springfield never straightened the frame (just made the cosmetic fixes to the exterior stretch and interior damage). Bottom line is that insurance companies know that 99% of folks will never go to the effort of an expensive and time consuming lawsuit. And they use this fact to their advantage when they slow-walk and low-ball their settlement offer to you. Insured drivers beware!

 

[SDRick]

Great write up!

While my experience with car insurance pales by comparison I did have to battle my own company which said my wife was 100% at fault in a $5,000 accident. The physical evidence showed the exact opposite and after many hours and a few meetings and physical inspections they did reverse their decision giving my wife 0%.

Yes, driver beware. To make it even more interesting, factor in the differing state laws, a variety of coverage offered by a multitude of companies and it is only slightly more transparent than health care pricing.

 

[2012MS85]

Great write up!

While my experience with car insurance pales by comparison I did have to battle my own company which said my wife was 100% at fault in a $5,000 accident. The physical evidence showed the exact opposite and after many hours and a few meetings and physical inspections they did reverse their decision giving my wife 0%.

Yes, driver beware. To make it even more interesting, factor in the differing state laws, a variety of coverage offered by a multitude of companies and it is only slightly more transparent than health care pricing.

Thanks @SDRick. Glad you fought it out with the facts and got a poor decision reversed. I try to give the pertinent details here so others may learn from my experiences and challenges (not to "game the system"). But until someone actually has to tangle with an insurance claim, one doesn't realize what he's up against. And the fact that every state has different laws on what is owed (e.g., LOU, DV, etc) makes it all the more challenging. Info is power.

 

[kimberj]

@2012MS85 My opinion was based on what I read at the time of my posting, since yours is a commercial rental scenario my opinion is invalid.

It's not like I like insurance companies, I personally had to battle them for over 8 months, even though the other person (a old lady) hit my parked car and was 100% at fault. Sorry to hijack your thread.