The Untapped Recovery in Fleet Collisions

When a municipal or public-sector fleet vehicle is hit through no fault of its own, risk managers typically think of one category of recovery: property damage. Repairs, parts, labor, and physical restoration tend to dominate conversations about claims. Yet two equally compensable elements, Loss of Use (LOU) and Diminished Value (DV), are routinely left unclaimed, even though they represent significant real-world financial impact to public entities.

Most organizations miss these dollars because many risk managers may not know that these items are owed or don’t have a system in place to recover them.In most states, LOU and DV are legitimate, recoverable damages in any not-at-fault collision, and public entities leave substantial money on the table by failing to pursue them.

Loss of Use represents the value of a vehicle’s downtime. For commercial fleets, public works departments, transit agencies, utilities, and municipal operations, downtime has a measurable cost. When a unit is out of service, the organization loses operational capacity or must pay for substitutes, such as rentals, overtime labor, delayed service delivery, or reduced operational reliability. Even if no rental is obtained, the law allows recovery of the reasonable rental value or the reasonable daily operational value of the vehicle.

Diminished Value is equally important and often misunderstood. Even after repairs are completed, a vehicle with an accident in its history is worth less than before the loss. For public entities that rotate, auction, or remarket vehicles, this reduced resale value is real and quantifiable. Courts have long recognized that a perfectly repaired vehicle can still incur an economic penalty simply because it has a history of damage. That difference is recoverable.

A critical point is that LOU and DV are recoverable even after the physical damage is paid and the claim is closed. Depending on the state, this recovery window ranges from two years to no limit. Even if a fleet uses its own collision coverage, the entity still has the right to pursue LOU and DV from the at-fault party’s carrier.

When multiple claimants compete for the same liability limits in a multiple-vehicle collision, including LOU and DV, with the damage claim, the public entity is at the front of the line for the maximum percentage of available limits.

For risk managers, these recoveries are not just “extra money,” they are part of restoring the entity to its pre-loss position, which is the core purpose of risk management. The key steps are straightforward: document the downtime, calculate a reasonable daily value, quantify the diminished value using a recognized method, and submit both elements with the property damage claim.

Public entities operate under tight budgets, aging fleets, and increasing service demands. Recovering every legally available dollar is not only prudent, but it also strengthens operational resilience. LOU and DV are not loopholes; they are established components of indemnification. When properly asserted, they return meaningful revenue to the communities you serve.

I can’t speak to other firms' performance, but at ACM, municipalities average about 70% above physical damage utilizing our service.