If your property, such as your vehicle, is damaged in Utah due to an accident or covered event, the insurance company—whether your own (first-party claim) or the at-fault party’s (third-party claim)—has specific obligations under Utah law to treat you fairly and compensate you for your losses. These obligations include monetary damages, procedural requirements, and ensuring fair valuation of your property. Here’s what the insurance company owes you under Utah law, including coverage for loss of use and rental cars. A First Party claim is your own insurance and a Third Party claim is the other person(s) insurance.
1. Monetary Damages for Property Damage
Utah law requires insurers to compensate you for the cost to repair or replace your damaged property, such as a vehicle, based on specific valuation standards:
- Fair Valuation of Your Vehicle: For first-party claims (your own insurance), the insurer must pay the actual cash value (ACV) of the vehicle or damaged part, considering:
- Replacement cost at the time of loss, minus depreciation.
- Actual wear and tear (or lack thereof) of the vehicle or part.
- Taxes and fees incurred for replacement.
- The vehicle’s true useful life, not just its age or a generic formula. Utah Admin. Code R590-190-11(1)(a)-(e)
- For third-party claims (against the at-fault driver’s insurance), the insurer must base compensation on the market value or actual cost of a comparable vehicle at the time of loss, including applicable taxes, license fees, and transfer fees. Utah Admin. Code R590-190-11(2)(a)
- Repairs: If the insurer elects to repair your vehicle and designates a repair shop, they must restore it to its pre-loss condition at no additional cost to you beyond policy deductibles, within a reasonable time. Utah Admin. Code R590-190-11(8)
- Additional Damage: If a repair shop discovers additional accident-related damage, the insurer must cover it unless they can prove it’s unrelated to the accident. Utah Admin. Code R590-190-11(8)
Example: If your car is totaled, the insurer must pay the market value of a similar vehicle, including taxes and fees, not just a lowball offer based on outdated data. For repairs, they must ensure the car is fully restored without you paying out-of-pocket for accident-related damage.
2. Loss of Use and Rental Car Coverage
If your vehicle is damaged and unusable, Utah law requires the insurer to compensate you for loss of use—the inconvenience and cost of being without your vehicle:
- First-Party Claims: If your policy includes loss of use coverage (often called rental car reimbursement), the insurer must pay for a rental car or substitute transportation costs while your vehicle is being repaired or until a reasonable settlement offer is made for a totaled vehicle. Check your policy, as coverage limits (e.g., $20/day or 20 days) may apply. Utah Admin. Code R590-190-11(9)(a)
- Third-Party Claims: If the at-fault driver’s insurer accepts liability, they must pay for the “reasonably incurred rental cost of a substitute vehicle” or transportation costs from the date of the accident (if timely reported) until repairs are complete or a fair settlement offer is made for a total loss. [Utah Admin. Code R590-190-11(9)(a)(ii)]
- The rental car should be comparable to your damaged vehicle (e.g., same size or class). If you have special needs (e.g., a minivan for family transport), inform the insurer, as they may cover a similar vehicle.
- Insurers often pay a flat rate (e.g., $20-$30/day), but you may need to provide evidence of rental costs.
- Timing: Insurers cannot refuse to pay for loss of use while investigating the claim, unless they determine they’re not liable. Payments cover the period the vehicle is out of service for repairs or until a settlement offer is made for a total loss. Utah Admin. Code R590-190-11(9)(c)
Example: If your car is in the shop for 10 days, the at-fault driver’s insurer must cover a rental car or transportation costs for those 10 days, provided they accept liability. If you rent a car, keep receipts to document costs.
3. Procedural Obligations Under Utah Law
Utah’s Unfair Property, Liability, and Title Claims Settlement Practices Rule (R590-190) outlines how insurers must treat claimants to ensure prompt, fair, and equitable settlements:
- Prompt Response: Insurers must acknowledge your claim within 15 days of notification and provide a substantive response. Utah Admin. Code R590-190-10
- Timely Payment: Insurers must pay approved claims within 30 days of receiving a properly executed proof of loss, unless liability is unclear. Failure to do so is considered an unfair practice. Utah Admin. Code R590-190-10(3)
- Ongoing Communication: If the investigation takes longer than 30 days, the insurer must update you every 45 days with reasons for the delay (unless you’re represented by a lawyer or public adjuster). Utah Admin. Code R590-190-10(4)
- Fair Investigation: Insurers must conduct a thorough and reasonable investigation. They cannot deny a claim if liability and damages are “reasonably clear” or pressure you to settle for less by delaying payment. Utah Admin. Code R590-190-10(3)
- Documentation for Low Offers: If the insurer offers less than the market value of your vehicle, they must provide documentation justifying the deviation (e.g., condition, mileage, or aftermarket features). Utah Admin. Code R590-190-11(2)
- No Unreasonable Demands: Insurers cannot require you to travel an unreasonable distance to inspect a replacement vehicle, obtain a repair estimate, or have your car repaired at a specific shop if liability and damages are clear. Utah Admin. Code R590-190-11(3)
Example: If the insurer offers a settlement far below your car’s value, demand their documentation. If they delay payment without explanation, they may be violating Utah’s fair claims practices.
4. Duty of Good Faith and Fair Dealing
Utah law imposes a duty of good faith and fair dealing on insurers, particularly for first-party claims. This means they must:
- Act in your best interests, not just their own.
- Avoid denying claims that are “fairly debatable” without a reasonable basis. If a claim is debatable, they can investigate but must do so fairly. [Prince v. Bear River Mutual Insurance Co., 56 P.3d 524, 530 (Utah 2002)]
- For third-party claims, the insurer’s primary duty is to their policyholder (the at-fault driver), but they must still follow Utah’s fair claims practices and avoid deceptive tactics.
If an insurer acts in bad faith (e.g., unreasonably denying or delaying a valid claim), you may be entitled to additional damages, such as attorney fees or punitive damages, through a lawsuit. [UMIA Insurance, Inc. v. Saltz, 2022 UT 21, 515 P.3d 406 (Utah 2022)]
5. Additional Considerations
- Comparative Negligence: Utah’s comparative negligence law means your compensation may be reduced by your percentage of fault. If you’re 50% or more at fault, you cannot recover damages. For example, if you’re 20% at fault, the insurer may pay only 80% of your damages. Utah Code Ann. § 78B-5-818
- Deductibles: For first-party claims, you’re responsible for your policy’s deductible. If you file a third-party claim and the at-fault insurer accepts liability, they must reimburse your deductible.Utah Admin. Code R590-190-11(3)(c)
- Personal Property: The at-fault driver’s property damage liability coverage may cover personal items damaged in your vehicle (e.g., a laptop). Provide documentation of the items’ value.
- Small Claims Court: For disputes over property damage (e.g., unfair valuation), you can file a small claims action without limiting your ability to pursue bodily injury claims separately. Utah Code Ann. § 78A-8-102(5)
6. What You Should Do
To ensure the insurer meets their obligations:
- Document Everything: Keep photos of the damage, repair estimates, rental car receipts, and all communications with the insurer.
- Review Your Policy: Understand your coverages, limits, and deductibles (first-party claims).
- Request Documentation: If the settlement offer seems low, ask for the insurer’s valuation data.
- Don’t Accept Low Offers: Consult an independent appraiser or attorney if the offer doesn’t cover your losses.
- File Promptly: Notify the insurer as soon as possible to avoid delays.
- Contact the Utah Insurance Department: If you believe the insurer is acting unfairly, file a complaint at insurance.utah.gov or call (801) 957-9200.
- Consider Legal Help: For complex claims, lowball offers or bad faith, a Utah attorney or claims handling company such as Property Damage Professionals can help maximize your recovery. Many work on contingency, meaning no upfront costs.
- Call Property Damage Professionals and let them use their expertise and direct access to their legal team to ensure you are treated fairly.
Conclusion
In Utah, insurance companies owe you fair compensation for property damage, including the actual cash value or repair costs, loss of use (via rental cars or transportation costs), and a prompt, transparent claims process. They must value your vehicle based on market data or replacement costs, provide a comparable rental car when applicable, and adhere to strict timelines and fair practices under [<a href=”https://adminrules.utah.gov/public/search/R590-190/Current%20Rules”>Utah Admin. Code R590-190</a>]. If they fail to meet these obligations, you have options, from negotiating to legal action. Know your rights, document your losses, and don’t hesitate to seek help to ensure you’re fully compensated.
Disclaimer: This information is for general guidance and not legal advice. For specific claims, consult your insurance policy or Property Damage Pro’s. Laws and regulations can change, so verify with the Utah Insurance Department or legal counsel.
Hyperlinks in the citations for Utah Admin. Code R590-190-10 and Utah Admin. Code R590-190-11, as well as Utah Code Ann. § 78B-5-818 and Utah Code Ann. § 78A-8-102(5). Since the Utah Administrative Rules website does not provide direct links to specific subsections (e.g., R590-190-11(1)(a)-(e)), the links point to the main rule section. The hyperlinks are embedded in the citation text for a clean, user-friendly experience. Case law citations (e.g., Prince v. Bear River) are not hyperlinked, as they are judicial opinions without direct public links in the provided context, but they remain as references for credibility.
