After an automobile accident, it can often be difficult for those involved to find a replacement vehicle. The Virginia General Assembly addressed this fact with the implementation of Va. Code Ann. § 8.01-66, which provides reimbursement to a non-at-fault party for costs associated with a temporary rental vehicle. In drafting this code section, the General Assembly clearly attempted to balance the interests of both the at-fault and innocent party.
- 8.01-66 allows a party who is “entitled to recover for damage to or destruction of a motor vehicle . . . to recover the reasonable cost which was actually incurred in hiring a comparable substitute vehicle for the period of time during which such person is deprived of the use of his motor vehicle.” Va. Code Ann. § 8.01-66(A). The General Assembly placed a few restrictions on this avenue of damage recovery in an attempt to balance the interests of both parties to the accident. These balancing restrictions can play an important role in an individual’s ability to recover and the amount of such recovery.
First, the individual seeking these damages must be “entitled to recover for damages” as a result of the accident. Though this is the first, and seemingly most basic step, it may prove difficult in practice. Because Virginia adheres to the doctrine of contributory negligence, if the party seeking damages negligently contributed to the accident in any way, he or she will be barred from recovery under § 8.01-66(A). Therefore, analyzing the facts surrounding each accident is the important first step to applying § 8.01-66(A).
Second, § 8.01-66(A) requires that the costs must actually be incurred. Though the Virginia Courts have not defined the term “actually incurred,” it would seem that this limiting language requires the claiming party rent a replacement vehicle and incur the expense before making a claim for the rental value. Again, this requirement seems to be an attempt by the General Assembly to balance the interests of the at-fault and innocent parties. This language allows the innocent party to be reimbursed for expenses arising from the at-fault party’s negligence, but precludes the innocent party from incurring a financial windfall by simply claiming the potential cost of a rental vehicle without incurring that cost.
Next, § 8.01-66(A) requires the rental of a “comparable substitute vehicle.” This section makes sense when looked at from the prospective of the General Assembly’s intent to balance the interests of both parties and keep the innocent party in the same position he or she would have been in but for the accident. For example, a mother with four kids who loses the use of minivan would be placed in an unfair position if she was only reimbursed for the cost of a compact car. On the other hand, this provision also protects the at-fault party from paying for an expensive foreign sports car rental when the damaged vehicle is a standard sedan.
Finally, § 8.01-66(A) limits the duration of the rental period. As noted above, recovery is only permitted during the time the innocent party is without a vehicle. Additionally, the General Assembly placed a reasonableness restriction on the time a party may be compensated for loss of use of their vehicle. § 8.01-66(A) states, “Such rental period shall not exceed a reasonable period of time for such repairs to be made or . . . a reasonable time to purchase a new vehicle.” Therefore, though a claimant may be without a vehicle for weeks or even months, his recovery is limited to the reasonable time needed to fix the vehicle (as supported by expert testimony) or, in the event of a complete loss, the time necessary to purchase a replacement vehicle. What constitutes a reasonable replacement time is not defined by statute or case law, but likely is a factual dependent analysis that depends upon when the claimant receives payment from the insurance company, among other factors.
Beyond the general terms of § 8.01-66, governing when a party may be reimbursed for rental costs, the section also discusses an insurer’s role in recovery for damages for loss of the use of a vehicle. § 8.01-66(B) provides that if an insurance company “fails to provide a comparable temporary substitute vehicle to any person entitled to recover [under] subsection A, and if the trial judge of a court of proper jurisdiction subsequently finds that such refusal or failure was not made in good faith, such company shall be liable to that person in the amount of $500 or double the amount of the rental cost he is entitled to recover under subsection A, whichever amount is greater.” However, the General Assembly again applied a balancing approach to § 8.01-66 and requires, in the alternative, “if the trial court finds that an action brought against an insurance company . . . under subsection B is frivolous, or not to have been brought in good faith, the court may in its discretion require the plaintiff to pay the reasonable attorney’s fees, not to exceed $350, incurred by the defendant in defending the action.”
Importantly § 8.01-66(B) does not create a cause of action against an insured for his or her insurance company’s denial of a plaintiff’s claims for rental reimbursement. The Code requires that such a claim must be brought against the insurance company itself. Marios v. Kielsgard, 51 Va. Cir 4, 5 (Fairfax County, 1999) (“Section 8.01-66(B) only applies when a party has a cause of action directly against an insurance carrier (e.g. a policy holder) or a self-insured company. It does not make an insured liable for statutory damages as to a claimant when the insured’s carrier denied (even in bad faith) a claim for the cost of a rental car.”).
If you come across a claimant seeking rental reimbursement, the key is to remember the General Assembly’s balancing approach to rental reimbursements. If your insured is at-fault, the claimant is entitled to rental reimbursement, but that rental must be reasonable in kind (a comparable make and model as the damaged vehicle), reasonable in time (the realistic time necessary to repair or replace the damaged vehicle), and actually incurred by the claimant. If the innocent party’s claim for rental reimbursement is denied by the at-fault party’s insurance company, that company could be subject to a bad faith claim, but the claim must be brought directly against the at-fault party’s insurance company and cannot be tacked onto a legal claim individually against the at-fault party.