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Insurance companies are in the business to collect premiums and keep the money. They are not in the business of paying claims. It’s not profitable. A perfect example is property damage claims. Most people are entitled to loss of use damages and rarely claim them from the responsible party. Here is the law.

Where property is injured, recovery is allowed for loss of use during the time required for repairs (see supra,

§1718). Where it is totally destroyed, there is authority denying recovery for loss of use, chiefly on the common law theory that destruction changes the plaintiff’s right from one of ownership to a claim for the value. (See 33 So. Cal. L. Rev. 451.) However, in Reynolds v. Bank of America (1959) 53 C.2d 49, 345 P.2d 926, the court disapproved prior dicta and followed the Restatement in rejecting this limitation. Defendant’s testator had negligently destroyed plaintiff’s airplane. Recovery of its value, $30,000, was allowed by the trial judge, but value of its use for the 4-month period required to find a replacement, and loss of business profits for this period, was denied. Held, reversed.

“There appears to be no logical or practical reason why a distinction should be drawn between cases in which the property is totally destroyed and those in which it has been injured but is repairable, and we have concluded that when the owner of a negligently destroyed commercial vehicle has suffered injury by being deprived of the use of the vehicle during the period required for replacement, he is entitled, upon proper pleading and proof, to recover for loss of use in order to ‘compensate for all the detriment proximately caused’ by the wrongful destruction.” (53 C.2d 50.) (See Rest.2d, Torts §927(2)(d); 22 Am.Jur.2d (2003 ed.), Damages §§296, 297; 33 So. Cal. L. Rev. 451 [pointing out that speculative recovery can be avoided by strict insistence on minimizing damages]; 12 U.S.F. L. Rev. 311 [admiralty collision cases]; 73 A.L.R.2d 719 [measure of damages for destruction or injury to airplane]; 18 A.L.R.3d 497 [recovery for loss of use of motor vehicle damaged or destroyed].)

Ultimately, the consumer needs insurance to protect from a loss.

For more information on this subject, please refer to the section on Car and Motorcycle Accidents.

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