Claimfast, are they my friend?

The_Deep

My car was very slightly dented by another car in a Tesco car park recently. The offending driver inspected the damage and drove off. Unfortunately for him, the incident was witnessed and the other driver has since been formally cautioned by the police. I reported it to my insurance company, Saga, and Claimfast, also part of the holding company, Acromas, telephoned me.

The telephone call was long and complicated, not high pressure, but a bit pushy, the chap on the other end seemed to want to make all my decisions for me.
Basically, what Claimfast wanted me to do is enter into a credit hire agreement with their preferred hirer, Enterprise, to hire a similar car to my own, for up to three months, but it seems to me that, as my name will be on the consumer credit agreement, if things went wrong, I should ultimately be responsible for the hire charge, which, I am lead to believe, could be considerably more than the spot rate.

My current insurance does not include a replacement vehicle, and I am mindful of my common law duty to mitigate the TPI’s losses.

I have read much on here, HJ, and various law reports on the internet, and it does seem to me that firms like Claimfast have been set up to make a profit from non fault clients, perhaps through “introductory fees” from car hire firms, crash repairers, and personal injury solicitors.

I attach a copy of a letter I am mindful to send them.

Dear Sirs

Non-fault accident – Your reference MA71456

I acknowledge receipt of your letter dated 25th September 2011.

I note that you wish me to enter into a credit hire agreement with your preferred car hire company and body shop, but that you also wish me to sign a Mitigation statement to the effect that I am aware of my common law duty to incur only reasonable expenses.

As, from what I have read, credit hire agreements are considerably more expensive per diem than spot rates, and there is no question of impecuniosity in this instance, I am wondering what, should the third party’s insurer challenge an inflated credit hire bill, or indeed my need for a replacement vehicle at all, my defence would be to signing such an agreement. As a matter of interest, how much would Enterprise charge per day for a Vauxhall Insignia automatic, as against the spot rate for a smaller automatic?

In question 1 of your F.A.Q.s you state that you are a credit hire organization, What therefore is you primary purpose in dealing with this claim, is it to profit by means of introduction fees from the car hire company and the body shop, or is it to recover my uninsured losses in the most advantageous manner to me. Do you receive a commission, referral or introduction fee, or any other financial inducement from
either Enterprise or the body shop?

I have to say that the possibility of having to fill in lots of forms and perhaps attend court to defend my actions does not fill me with joy. As I am sure that you are aware, accident management firms such as yours have, rightly or wrongly, been singled out for much criticism on the internet, and several people using credit hire companies have been put to a lot of hassle and inconvenience by third party insurers.

Yours sincerely

Phantom247

If at all possible, to save yourself any possible hassle is to reject the proposed hire from Claimfast, although they are one of the more reputable Credit Hire companies in the industry, if you truly wish to mitigate your losses then I would contact the other party's insurer and see if they are willing to deal with your claim without going through Claimfast.

Obviously, this assumes that the other party has reported which if they have not, then you can to the other party's insurer but expect a minor delay while they verify with their client and they would look to deal with your repairs and hire if needed.

If however, you decide against this route and pursue Claimfast, be mindful, that if you sign the agreement and the other party's insurer disputes the amount being charged you may have to turn up in court to assist the Credit Hire organisation to pursue the outstanding costs.

In regards to the amount Enterprise will charge, based on only a Vauxhall Insignia which they classify as a category F vehicle it would potentially be £45.93 exclusive of VAT. Total charges of £55.12 incl of VAT.

Total Charges include damage waiver (including Theft Protection), Third Party Liability, Road Fund Licence, and VAT. Additional surcharges may apply according to Enterprise's website.

Claimfast would be using ABI GTA (ABI General Terms of agreement), now dependent on the engine size which for a Vauxhall Insignia would either be a 1.6, 1.8 or 2.0, normally it would be either 1.8 or 2.0 which is comparable to the ABI GTA Scale of S6 or S7 (44.25 exclusive of tax or £62.06 per day, plus they are allowed to charge a further £5 per day for your vehicle being an automatic).

So they could potentially charge £67.06 per day exclusive of VAT, now they generally will ask an independent engineer to inspect your vehicle, which they are allowed to do under the ABI GTA scheme and the engineer is allowed 2 working days to inspect your vehicle, it will then be sent back to Claimfast or Acromas whomever is dealing with the repairs who will then authorise and the repairs will start, now if your vehicle is not roadworthy you will be provided with hire at the beginning, if it is roadworthy the hire should start on the booking in date with the selected repairer, otherwise if it starts earlier that is likely to cause an argument between Claimfast and the other party's representatives.

Once the repairs are complete, you are allowed 24hrs to return the hire vehicle.

The_Deep

Thank you Phantom, most informative. I have obtained a quote from Enterprise to hire an Insignia 2 litre auto for around £40 a day at spot rates, I expect that I could knock a third off that if I shopped around for a smaller car.

I will contact the TPI as you suggest, from what I have read about Claimfast it would appear that we each have different priorities, and, unless the TPI wants to play hardball, I am sure that there would be less hassle using them.

vaio

Whilst being no great fan of credit hire I don't understand why you are comparing their hire rates with what you could get for a smaller car? why not compare their hire rates with bus fares? or shoe leather?

As you say, going direct to the third party will probably minimise costs but remember that if you do you lose the protection of the FOS should you have a problem with the repair quality.

The_Deep

I don't understand why you are comparing their hire rates with what you could get for a smaller car? why not compare their hire rates with bus fares? or shoe leather?

Because that is what a judge would do when considering whether I had discharged my common-law duty to mitigate the TPI's exposure, or not.

I understand that most of these credit hire claims end up in court because the person signing the hire agreement has been the foil of a rapacious accident management company which spins out the time you have the hire car for. Ther was one case, thrown out, where the credit hire company tried to bounce the TPI for £57.000 for the hire of a Porsche.

vaio

Patronise away, I won’t be offended but I would be surprised to see evidence that a judge would disallow an otherwise reasonable “equivalent car” hire car claim with the argument that you should have taken a smaller car. As I said before, what’s next? Buses? Walking?

Mitigating the costs doesn’t include you being disadvantaged over the position you would have been in had the accident not happened.

I’d be interested to read the details on the £57k Porsche claim, Google is strangely silent on it, do you have a link?

vaio

And, don’t forget why credit hire/repair companies exist.

They are for the innocent victims of negligent drivers who couldn’t afford to hire a replacement car out of their own pocket and therefore, were it not for credit hire, would be put to considerable inconvenience/disruption/expense through no fault of their own.

If third party insurers were more proactive in assisting the innocent victims of their policy holders negligence then credit hire would disappear overnight.

In your particular case, if you have the means to hire an equivalent replacement whilst the insurance wheels grind slowly away then you would be well advised to do so but many don’t and for them credit hire is possibly the only option to enable them continue with their normal life style.

The_Deep

Mitigating the costs doesn’t include you being disadvantaged over the position you would have been in had the accident not happened.

It does not, but if you are content with a smaller car, or do not need a car at all, you are not disadvantaged.

I do not have the link to hand, but if you google "Credit Hire" you should, with some research, be able to find it on the first page.

vaio

I'm confused, earlier you justified comparing credit hire equivalent car rates with smaller car spot rates because

The_Deep wrote: »

...... that is what a judge would do when considering whether I had discharged my common-law duty to mitigate the TPI's exposure........

now you seem to be justifying it by saying it's because you are content with a smaller car (which begs the question why didn't you buy a smaller car in the first place.)

If you are happy with a smaller car that’s fine, but to suggest that others are (or should be) obliged to do the same is misleading.

Still can't find the £57k Porsche claim

The_Deep

Still can't find the £57k Porsche claim

Neither can I, but I have found one for £63,000

http://www.blm-law.com/2114/7861/objects/news/blm-succeeds-in-court-of-appeal-credit-hire-case.html

which begs the question why didn't you buy a smaller car in the first place.

I need a large car for our twice yearly visits to Spain, when I fill it with wine on the return leg, I also need a large car on occasion when refurbishing one of my properties, my wife is content with a smaller car for her twice weekly visits to the supermarket.

With regard to your confusion, perhaps these may help you:

http://www.13kbw.co.uk/articles/credit-hire-practical-problems-and-solutions.pdf

http://www.glaisyers.com/files/Credit_Hire_MASS.pdf

http://www.pibriefupdate.com/mags/20060717/article8.php

http://www.ropewalk.co.uk/news/credit_hire_revisited_ah.pdf

I am not a lawyer specialising in this subject, so I do not pretend to fully understand the complexities of Credit Hire, but I do know that it is not something in which I wish to become involved.

vaio

As you have the money to hire a replacement, are happy with a smaller car and yours is only slightly dented then I’d guess credit hire is not for you, sounds like you could manage with the standard courtesy car when your is in for repair and wait for the system to return your excess & NCB (assuming the other party accepts liability).

I still maintain that your earlier statement that a judge would reject an otherwise valid credit hire claim on the grounds that an equivalent rather than smaller car was provided is misleading and almost certainly wrong. As an ordinary motorist, I’d say that the mere fact that I choose to have a certain type of car means I’m entitled to an equivalent as a replacement.

If you feel the need to write letters maybe you should target the insurance companies & question why they seem to be enthusiastically defending credit hire claims made against them whilst equally enthusiastically passing obviously unsuitable policy holders (such as your good self) onto credit hire companies rather than dealing with claims in house.

I’d guess it’s something to do with the nice fat referral fees.

Good luck with your claim, hope it gets sorted out before your next wine run & without too much inconvenience.