Credit hire companies are seen by many as “the bad guys” who cost insurance companies millions of pounds per year which then increases our insurance premiums. But is this actually the case? Are these poor insurance companies being preyed upon?
Historically, before the seminal case of Dimond v Lovell, if a driver had an road traffic accident that was not his fault, he would have to either rely upon his chosen repairing garage to provide him a free courtesy car or pay up front for his own hire charges. If he did pay up front for his hire charges, generally, he would have to chase the at fault driver’s insurance company for a reimbursement of these charges that may or may not have been forthcoming. If he did not receive payment, he would have had to issue legal proceedings by himself, incurring further costs, to get this money back.
The hire companies stepped into this void. They provide the innocent motorist with a good service. They provide a like for like replacement car, liaise with the garage to organise repairs and chase the at fault driver’s insurance company for admissions of liability and payment for the repairs. If liability is in dispute, they also assist the hirer in dealing with their claim. For many drivers it could be a first road traffic accident. If he chooses to utilise his own insurance, he will no doubt have to pay an expensive policy excess of hundreds of pounds which he might not get back. His own insurance company will not generally expend too much effort in recovering this money for him. He would have to chase this money himself. A win for the at fault driver’s insurance company.
The hire company fight the innocent driver’s corner. They spend hours on the telephone on hold to insurance companies on behalf of the innocent driver- half the time, the insurers refuse to take their calls and demand that everything is done by way of letters which may or may not be received. Eventually, the hire companies can do no more and pass the files to Solicitors with a request that we then “join the fight” on behalf of the innocent road traffic motorist.
As credit hire and personal injury specialists, we have seen it all. We have seen a client who was disabled and a single parent being told by the at fault driver’s insurance company that he would have to pay approximately £300.00 up front before they would provide him with a car. Or the elderly lady who relied upon her pension and could not have afforded to pay for a hire car, without the credit hire company’s assistance, she would literally have been housebound for over 6 months as she lived in a small village with virtually no access to public transport.
Credit hire may not be the answer to all of the problems seen in the at fault driver’s insurance company versus innocent motorist fight – but at last there is somebody sticking up for the little guy for once….