Loss of Use Damages in Texas Total Property Loss Claims–Insurance Subrogation Issues–Fort Worth, Texas Subrogation Lawyers

Texas law relies generally on the principles outlined in Hanna v. Lott.  If a vehicle has been totally destroyed, no additional recovery is allowed for the unavailability or loss of use of the property while it is being replaced.  I believe I have previously forwarded you a copy of  Hanna v. Lott.

Insurance companies often take the position that no matter when the determination is made, a total loss is a total loss and the claimant is entitled to no more than the value of the vehicle (and that loss of use damages would therefore not be allowed).

The Mondragon v. Austin case points out that this can result in the inequitable outcome that damages are limited in a total destruction case to the value of the vehicle but cost of repairs plus loss of use damages in a non-total loss case can result in damages that exceed the value of the vehicle. The court states, however that “the difference in the rules exists, however, because courts assume that a person does not suffer loss of use damages when a car is a total loss.  Courts assume that the car can be replaced immediately.  In contrast, we assume a partially damaged car, while repairable, cannot be repaired immediately.”

It is important to point out that Mondragon v. Austin  does not deal with a total loss situation.  In that case, the Defendant stipulated that the appropriate measure of loss of use damages was the value of the car rented on a daily basis.  The Defendant also stipulated to the cost of repairs to the vehicle.

There was no evidence of, and no contention on anyone’s part, that the vehicle had been totally destroyed.

The court only states in dicta “we believe the better policy might be to reconsider permitting loss of use damages in total destruction cases.”  The very fact that the court says “reconsider” suggests that the court is conceding that Texas law does not permit recovery of loss of use damages in total loss situations.

Likewise, the older case Alexander Schroeder Lumber Company v. Merritt case from 1959 does not indicate that it deals with a total loss case.  It, from all appearances, deals with a scenario where a cost of repairs measurement was used where the vehicle was not a total loss.  That is why cost of repairs were also allowed.

The clear message from all of this is that you should always try to make an early determination that a vehicle is a total loss if it appears that the cost to repair plus loss of use damages is going to exceed the total value of the vehicle if considered totaled.

It is not then necessary to pay loss of use damages in a total loss situation.  The law in effect presumes that a vehicle that has sustained a total loss is immediately replaceable.  Insurers can take the position that it does not matter when the determination is made that the vehicle is a total loss, as long as it is made.  Obviously, the sooner the determination is made, the better and the more defensible the position would be.


Williams, McClure & Parmelee is dedicated to high quality legal representation of businesses and insurance companies in a variety of matters. We are experienced Texas civil litigation attorneys based in Fort Worth who know Texas courts and Texas law. For more information, please contact the law firm at 817-335-8800. The firm’s new office location is 5601 Bridge Street, Suite 300, Fort Worth, Texas 76112.

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