car accident - hit by 3rd party - I pay for car hire?!

miss_lisalou

Hi,

Could anyone help me, whether they have come across this before.
In August my car was hit by a third party whilst it was parked outside my house. The other person admitted liability and we both informed our insurance companies. My insurers Swinton arranged for my courtesy car whilst repairs were being carried out. I had no involvement in deciding what type of car I would receive - whether it was like-for-like etc, albeit this is something I paid for when taking out my insurance policy.

After the repairs were sorted and over 2 months after the accident, Quindell (the company who dealt with everything on behalf of my insurer) sent a 7 page questionnaire to me, explaining that as the other side had not yet paid, I had to provide details such as copies of my bank and credit card statements, to prove that I would not have been able to afford the hire vehicle myself.

I felt that this was inappropriate and intrusive to expect me to forward copies of my statements. I was the innocent party who was not even in my parked car when the other person crashed into it; part of the policy I paid for was the security of knowing I would have a courtesy car if I was hit by a third party; also, I had no influence over the type of vehicle they provided me whilst repairing my own car. Why should I be expected to pay for the hire charges in these circumstances?

This is something that is really worrying me. Has anyone else had this experience with their insurer, and what was the outcome please?

stator

That's odd, I've never heard of it before. Have you red the terms and conditions of your insurance? Does it say anything about the hire car being linked to liability or reimbursement from the 3rd party insurance?
I wouldn't send them off bank statements. Whether you could afford it or not is irrelevent, the liable party has to pay, assuming the costs are reasonable. If it's disputed liability then it comes down to your T&Cs of the policy.

rs65

Sounds like you have a credit hire car - not the policy benefit you paid for.

Did you sign an agreement when the car was delivered?

miss_lisalou

I did sign something when they dropped the car off, but I was not given a copy of it, and obviously it contained about 4 pages all of small print, but at no point was I told I may have to pay these costs.

rs65

Ask them for a copy.

chanz4

Will be a credit hire they are asking for the proof to mitigate the claim, play ball or it can end up costing you

Aretnap

It sounds like you weren't actually provided with a hire car under your own insurance policy but referred to an accident management company who provide you with a hire car on credit, then send the (inflated) bill to the third party's insurer.

The third party's insurer will not be suggesting that you should have been landed with the bill for the hire car yourself, but may question whether you could have afforded to hire the car yourself and send them the bill directly, rather than getting one on credit and increasing the costs. Things like your savings are obviously relevant to that question - if you have substantial savings and wouldn't have been inconvenienced by the temporary loss of a few hundred pounds it could be argued that you didn't do enough to mitigate your loss, and the third party insurer might not pay the full bill.

That needn't alarm you as generally the credit hire company takes on the risk of the insurer not paying (it's part of the justification for their inflated costs, I believe) and you would only end up liable if you'd mislead the hire company about your circumstances, or if you breached the terms of your agreement with them... for example by not providing them with the evidence they need to support the claim. The agreement you signed may well entitle them to ask for evidence of your finances. If it does, you should provide it.

[Deleted User]

Aretnap is right. Put simply you were conned into hiring the car on credit, with the associated interest costs and profit for the credit lender. Now the third party insurer is saying that if you had enough money to afford the rental from your own pocket you should have. The law says you need to minimize costs for the third party, so if you had savings there was no need to take out an expensive loan to cover it.

They are now asking you to provide evidence that you needed a loan to cover the cost of hiring the car. If you didn't they will argue that you didn't minimize their costs and so are responsible for the cost of the loan.

Always read contracts before you sign them. Also complain to your insurance company, and forward all letters to them to answer. They should provide the third party with a good reason why they passed you on to a finance company to cover the cost.

miss_lisalou

Thanks for your replies, which are useful. Although I still think this is outrageous. Why do consumers pay an additional fee for the future possibility of needing a courtesy car if the insurer is going to get a hire company to provide this? Surely this is misleading on the part of the insurer?
Nevertheless, if this is the case, then why was I, as the innocent party, not consulted on what type of replacement car I would like, rather than just being landed with the potential to pay the bill for whatever they decided to provide?

InsideInsurance

miss_lisalou wrote: »

Thanks for your replies, which are useful. Although I still think this is outrageous. Why do consumers pay an additional fee for the future possibility of needing a courtesy car if the insurer is going to get a hire company to provide this? Surely this is misleading on the part of the insurer?
Nevertheless, if this is the case, then why was I, as the innocent party, not consulted on what type of replacement car I would like, rather than just being landed with the potential to pay the bill for whatever they decided to provide?

You didnt deal with your insurer, you dealt with your broker.

The benefits under your insurance policy are useable irrespective of fault or even if there is a third party involved or not. Credit Hire is for the explicit circumstances of a non-fault accident with a liable third party.

I couldnt see any sample policy documents for the enhanced courtesy car policy on the swinton website but, subject to what your normal car is, even enhanced courtesy cars policies dont necessarily give out a like for like or suitable vehicle for your needs plus they normally have a maximum number of days they can be used for. Due to this credit hire may be the more appropriate solution even if you have paid for the enhanced car option.

Of course the fact that Swinton got a commission for selling you the enhancement and will have received a payment for selling your details to the credit hire company is another matter.

As others have already said, you should always read what you are signing. The documents for the car would have been a credit agreement. In 99% of cases this agreement puts all the risk on the credit provider the only times when the risk is transferred to you is if either (a) you lied to them or (b) you do not assist them in making their recovery.

Credit hire is typically 2-3 times more expensive than a normal hire car and they always push for a like for like replacement even if a much lower group car would be suitable for your needs. As a result of the massive bills insurers receive many will try to argue against the credit hire company on the grounds of did you need the car on credit, did you need the level of car you hired, did you need it as long as you had it etc. Hence the questionaire you've now received. Complete it and return it with the documents they request to avoid issues

OnanTheBarbarian

You had credit hire as other have said.

The reason for the bank statements and other documents being requested is that insurers challenge the rates charged by credit hire companies (despite them sending their own customers onto credit hire companies on a daily basis!)

The reason for the bank statements and other intrusive questions into your financial status is down to case law which has ruled that if a person is of limited means "impecunious" and did not have the means to self-fund hire, then the credit hire company are entitled to their full daily rate of hire as you had no other means by which to secure the use of alternative transport.

if your financial status showed that you did have the means to hire without incurring exceptional hardship, then the rate the credit hire company can recover is the equivalent rate on the high st.

You need to co-operate with the hire co and provide the requested info, otherwise they will just state you are in breach of your terms & conditions to assist them and they will just turn their sights on you.