Credit hire exists to provide a replacement vehicle after an accident. You as the hirer do not have to pay, as the bill is presented to the insurer of the person who caused the accident.
- Accident is the fault of another motorist.
- The motorist at fault is insured.
- You need a replacement vehicle while yours is being repaired, and have no other vehicle available.
Credit hire companies provide and repair vehicles after an accident when someone is to blame. They can help protect your insurance record, and that means your premium and no claims bonus. Their business is based on you being blameless, and someone else being responsible, and that person having insurance.
The situation usually looks like this. Your vehicle is off the road after a road traffic accident for repairs and you need a replacement car for a fortnight. Your own insurer may not be keen to give a courtesy car, and the body shop has none available. Do you take taxis or hire a car, and can you afford the expense? Credit hire and repair give you an option. You sign an agreement accepting liability for the cost of hire and repair, and if the hirer is confident someone else is to blame, and they have insurance in place, the credit hirer will provide a vehicle. The idea is to recover the cost from the insurer of the person to blame, and you pay nothing.
The benefit to you is that you do not have to make a claim on your own insurance. If you make a claim on your own policy your premium will increase and your no claims bonus will be affected, even if you are clearly not to blame.
If your own insurer pays your insurance record is affected, even when someone else is to blame. Some insurance companies will chase for reimbursement from the insurer of the driver to blame, but many do not. It is a question of economics for the insurance company, and protection of your insurance record or premium is not their first concern.
Credit hire companies do get stick for their hire rates, but to be fair they do exist because insurers often will not pay for alternative transport when your car is in for repair.
The respectable credit hire companies have agreements on rates with the insurance industry. There are good and bad credit hire companies. For them to be paid you must be liable to pay the hire. You must beware of ending up with the bill in your hand. To avoid problems you must take advice from an experienced solicitor who knows exactly how credit hire works.
Not all insurers are tight on courtesy vehicles, but if you have bought your policy on price do not expect first class service. If an insurance company offers a courtesy car the expense is usually covered by the body shop doing your repairs, or by a credit hire company. The insurance companies have found ways of providing a service without bearing the cost. That is to their credit as it allows them to be competitive on premiums, and cheap premiums are what we want. There is a price to pay for cheap premiums, and that is poor cover and poor customer service.
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