Car insurance claim, write off and credit hire

Manxman_in_exile

(Apologies in advance – this is a long post with requests for advice at the end)
I was recently involved in a RTC, driving my wife’s car, under which I am the named driver and she is the insurance policy holder. The other driver’s insurers have written to us indicating that he accepts liability, without prejudice. I informed both the police and our policy’s claims line within minutes of the collision. Our policy is fully comprehensive and includes a replacement vehicle. My wife’s car is probably a write off.
Later that day when my wife formally notified our insurers she did not initially appreciate that she was in fact talking to a claims management firm. They presented her with two options: either she could claim directly against her policy or they could arrange for another firm to claim against the third party’s insurers so that she would not have to claim against her own policy. The way the two options were explained to her she chose the former. We are not now sure if this was the right decision. We’ve tried to query this with the claims firm but they seem to be reluctant to discuss it with us. Neither did they tell my wife at the time that she had in fact a third option: to instruct her own solicitor to act against the third party.
The claims firm referred us to a car hire company. (I don’t know if this is significant, but they seem to be connected in some way with the company which the claims people have instructed to make a claim on our behalf). We picked up the hire car the following day. While doing some research on the internet I became concerned about three things. Had we unwittingly entered into a credit hire agreement? Second, were we covered for third party liability in the hire car? Third, were we entitled to a “like for like” replacement car? (What we’d got was not like for like).
We contacted the hire firm. They initially said it wasn’t a credit hire but subsequently told us that it was. They assured us, however, that if the other driver was not found to be 100% at fault that we would not be liable for any costs and would not be out of pocket. As regards third party insurance in the hire car they explained that we would be liable if we had any third party insurance “available” to us. Our insurers have confirmed we do not have such cover. The small print T&Cs of the hire firm appear to give us an indemnity (from their motor fleet insurance) against third party liability in the event that we do not have any suitable cover “available” to us. We haven’t resolved what constitutes an appropriate replacement vehicle yet.
We have recently been contacted by the firm (which we think is claiming on our behalf) asking our permission to remove what remains of our car from the secure compound where it is now located, and to transport it 50 miles away for the damage to be assessed. We’ve agreed. (Again don’t know if we’ve made right decision. It’s perhaps worrying that they at first thought we still had the car at home. They did not realise that the car had been recovered to a local garage after the accident).
Yesterday my wife and I received two letters from the third party’s insurers. He appears to be covered by two policies: one for personal use of his car, and one through his employers covering work as a delivery man. The letter addressed to me is from his work insurers. It states that I do not appear to have been at fault, but warns me that I have a responsibility to mitigate my costs in respect of car hire. They are offering us cheaper hire rates. (Incidentally, my wife doesn’t understand why they’ve written to me rather than her. She’s the owner and policy holder and the loss is hers).
The letter to my wife is from his personal insurer. They say, without prejudice, that he admits liability. They too offer us cheaper hire rates and are also offering to have our car inspected with a view to making us an offer.
Sorry for the lengthy preamble, but my questions are as follows:

• Should we take up the offer from his insurers for them to inspect the car and come up with a valuation for the claim, or would we be better off sticking with the people instructed by our claims management firm? Can/should we do both? Is the fact our car is probably being transported 50 miles away today a complicating factor?
• Should we explore the offer of cheaper car hire from either or both of the third party’s insurers to mitigate our losses, or should we simply trust that our claims management firm is acting in our best interests and would not enter us into an arrangement to our detriment? Could we end up being liable for the difference in hire rates?
  
  
• Have we already unwittingly entered into a credit hire agreement which could see us out of pocket in some way? Despite the assurances to the contrary from the car hire firm, my wife and I aren’t sure what to think.
• Do we have a potential third party liability problem with the hire car? The small print T&Cs seem to say that we would be indemnified by the hire firm’s motor fleet insurance if we had no third party cover available to us, but again we’re not certain. Surely the car hire firm wouldn’t let us take the car if it wasn’t covered in some way for third party liability? Is it a standard clause for hire firms to exclude third party liability if the hirer has it “available” to them?
  
  
• Are we entitled to a “like for like” replacement car until the claim is settled?
• Are the answers to the above questions dependent on the third party being 100% liable (which he appears to be admitting)? Would they be different if he was only partially liable?
  
• Regarding 1 and 2 above, the claims management firm warned my wife not to speak to any other companies. Are we prevented from speaking to the third party insurers?

Apologies for the super-long post but my wife and I feel we are going round in circles. We never expected to have so much hassle making a claim for an accident where we weren’t at fault. Hope somebody out there has some answers to help us.

Manxman_in_exile

Apologies for the weird formatting on the original post. I had to cut and paste from Word and I obviously haven't got the hang of it yet!

OnanTheBarbarian

You need to alert the company you are currently hiring from that you have received these letters from the third party insurers.

Essentially, the insurers are making you an offer of replacement vehicles at their expense in an attempt to help mitigate the amount of costs that arise.

Credit hire cars are expensive and so the insurers have developed ways of trying to drive down the costs by being pro-active.

If the company you are hiring from are made aware of these alternative rates, they can decide if they are willing to continue hiring to you at the same rate the insurers are offering to you.

If you did not mention these letters to the hire company and later on down the line when the credit hire invoice is stuck under the nose of the compensating insurers, the insurers start hooting about how you declined the offer of a cheaper equivalent car, the hire company could turn their attention to you for the reduced level of charges they would be able to recover.

So the best advice at this stage is to speak with the hire company and send them copies of the letters and be guided by them.

Just make it abundantly clear that if they agree to continue hiring to you after being made aware of the cheaper rates offered by the insurers, you are not going to get involved in a scrap about hire rates further down the line in the event the credit hire firm try to recover their full rates. If they don't agree with that, then tell them you will be looking to take up the offer of a replacement car from the insurers.

Quentin

Manxman_in_exile wrote: »

.....Are we entitled to a “like for like” replacement car until the claim is settled.....

You would be "entitled" were you getting the car as part of some insurance cover you had to supply you a "like for like" car.


From what you say this is not the case, and you have a credit hire car via your claim handler.


Because you must mitigate your losses, then you need to substantiate why you need a like for like car.


Why do you need it?

InsideInsurance

Back in my claims handling days there was a lot of contradictory case law on "like for like" replacement.

The general principle of law is that you must mitigate your losses, ie make them as small as reasonably possible, however if you have 5 kids, 3 dogs and a nanny its not reasonable to get you to accept a Ford Ka as a replacement for a few weeks.

There were a few pieces of case law that the credit hire companies used to refer to when trying to justify a like for like without a real need (often retired executives having S Class Mercedes simply because they can/ what theyve had for years but only do 5 miles a week to go to the supermarket and thats it). The cases, cannot remember their names off hand, were very wooly though and very poorly justified decisions in the judgement. Certainly werent the clear cut "the fact you had a luxury car is justification enough for needing a luxury car" type argument the credit hire companies claimed.



Ultimately, speak to the claims company. If they are advising there is no recovery against yourself then its their money on the line and therefore their advices you must follow.

Again in my day, my employer was part of the ABI credit hire scheme and so if the credit hire company got there first we couldnt then pull them out of hire and give them a car from ourselves. If however we offered a car first and the TP then went for credit hire afterwards we would only pay the credit hire company the rate which we would have paid our preferred supplier.

Avoriaz

Manxman_in_exile wrote: »

Apologies for the weird formatting on the original post. I had to cut and paste from Word and I obviously haven't got the hang of it yet!

That can happen.

Click "edit" on your first post, (optionally click "advanced" if you also need to revise the title) and you will be able to revise the text.

If you add a few paragraphs and spaces between sentences, it will make it more readable and you will probably get more interest and more responses.

Next time you write a long post in Word and paste it here, you can "preview" before posting. Or you can post it, have a look, and then go back and edit it if it needs tidying up.

Welcome to the forum. It is a mostly friendly and helpful place. You will soon get the hang of posting on here. :beer:

vaio

Quentin wrote: »

You would be "entitled" were you getting the car as part of some insurance cover you had to supply you a "like for like" car.

From what you say this is not the case, and you have a credit hire car via your claim handler.

Because you must mitigate your losses, then you need to substantiate why you need a like for like car.

Why do you need it?

Nah, the like for like bit is what you are entitled to if there is a third party liability. People have the cars they have because they want/need them and that doesn't change just because someone else crashes into it & writes it off, there is a "need" test but it's a low one and will pretty much be satisfied because that's the type of car you chose to own as it suits your needs & lifestyle.

The mitigation bit means you must obtain your broadly like for like car as cheaply as possible. If you can do it without significantly affecting your lifestyle then you are expected to hire one on the cheaper open market and reclaim the costs rather than relying on the more expensive credit hire (the impecuniosity test)

Having said that, logic would mean that mitigation would entail handing back the credit hire car and taking the cheaper offering from the at fault insurer but being the world of insurance I don't *think* it works like that, I seem to remember reading something that basically said there was a cosy little agreement that whoever got to the punter first gets to keep them so once you are in a CH car you can stay.

vaio

OT but this case is interesting http://www.kennedys-law.com/casereview/credithire/ £100k credit hire for an £8k car

InsideInsurance

vaio wrote: »

I seem to remember reading something that basically said there was a cosy little agreement that whoever got to the punter first gets to keep them so once you are in a CH car you can stay.

Not really a cosy little agreement but there is the ABI credit hire scheme in which certain agreements were made between the subscribers on both sides to bring in standard rates, standard services etc in exchange for not getting customers out of hire if circumstances change.

Look at the non-ABI credit hire providers and their rates are stupidly high in comparison to the already high ABI ones. From memory (and its a while ago so no one shoot me if I am not 100% accurate) if you looked at something like a BMW 535i and compare private hire, ABI credit hire and Bristol & London (a non-ABI provider) for 1 day hire you'd be looking at:

Private: c£140
ABI: £199.63 (max - some will be less)
non-ABI: c£800 (£600 hire + £100 collection/delivery each way)

InsideInsurance

vaio wrote: »

OT but this case is interesting http://www.kennedys-law.com/casereview/credithire/ £100k credit hire for an £8k car

It is an unfortunate consequence of our legal system that as the defendant never brought up the matter that the claimant could have claimed off their own insurance rather than waiting 591 days for the defendant to deal with the claim that this wasnt considered as part of the judgement.

OnanTheBarbarian

InsideInsurance wrote: »

It is an unfortunate consequence of our legal system that as the defendant never brought up the matter that the claimant could have claimed off their own insurance rather than waiting 591 days for the defendant to deal with the claim that this wasnt considered as part of the judgement.

Not the legal system at fault, the competency of the Defending insurers and their solicitors.