Costs of renting a replacement vehicle – What if the insurance company refuses to reimburse them?

Judikát - právní

Anyone can easily imagine a situation when our vehicle becomes (temporarily) immobile as a result of a traffic accident. As a standard feature, the accident insurance coverage offered by insurance companies these days includes reimbursement of the costs of renting a replacement vehicle. But what can we do if the insurance company refuses to reimburse these rental costs?

Such a situation has been recently addressed by the Constitutional Court. In that specific case, the insurance company refused to reimburse the portion of the costs of renting a replacement vehicle incurred from the moment when the crashed vehicle was declared as unrepairable. Their main reasoning for not reimbursing the rental costs, as claimed by the insurance company and later upheld by the courts, was founded upon the notion that it is not possible to temporarily replace a thing which is unrepairable; this decision was based on previous judicial decisions issued by the Czech Supreme Court.

However, the Constitutional Court did not share the opinion specified above, for a number of reasons. Most importantly, the purpose of providing a replacement vehicle is to enable the claimant to lead a life which is, in terms of quality, comparable to their life before the traffic accident. For the purposes of reimbursement, it is thus irrelevant whether the accident resulted in repairable damage to the vehicle or a total loss. Furthermore, the opinion established in the previous judicial decisions of the Supreme Court would ultimately lead to unfounded and undesirable discrimination of those claimants whose vehicle was written-off as a result of the accident.

It follows from the above that the insurance company cannot refuse to reimburse the costs of renting a replacement vehicle only on the grounds that the vehicle is unrepairable. Nevertheless, the Constitutional Court emphasised that the claims for reimbursement of the costs must be reviewed on a case by case basis, particularly in the context of how efficiently they were spent.