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Car hire through insurer - AUXILIUS asking for additional documentation after claim has been settle

itgirlinuk
itgirlinuk Posts: 465 Forumite
Part of the Furniture 100 Posts Name Dropper Combo Breaker
Hi,

I had insurance with Directline for my old car which was written off after a bus hit the parked car. We had courtesy car agreement with my insurance, so when Directline said they would get get Auxillis to call us to arrange, I didn't think anything of it. I thought it was all part of the same insurance claim. Directline advised us heavily not to go directly to third party as the bus company offered to settle with me. But as I needed the car urgently and the third party couldn't supply one without sending someone to look it over and things (which was going to take a week or more), we went to our own insurer to deal with all of it.

After a lot of fighting, Directline got paid by the third party. But apparently, the car hire charges was a separate claim to the third party and hasn't been paid. We got the hire car for only 1 week as Directline wrote off the car. We were car less after the first week.

So, now - almost 11 months after the accident, Auxillis has sent us paperwork to fill all over again as they are going to court. In this PDF, they have asked us to declare our financial status and if we could have afforded to pay for the car hire ourselves or not.

Their exact questions are:

Financial position: This section relates to the insurers arguments over whether you could have paid for hire upfront yourself.
All information in this section is strictly confidential but could help settle your claim more quickly.

Without making unreasonable sacrifices, could you have afforded to pay for the hire charges without entering into a credit hire agreement?

Do you have any of the following?
Current account:
Credit Card:
Savings account:
If required, would you be prepared to provide bank and credit card statements?

I questioned this as I said I don't need to justify our financial situation as the car hire was part of the insurance agreement we had and I don't know why my financial situation matters.

They wrote back a long letter, but the 2 pertinent statements they made were:

As a result of being involved in a collision that was not deemed your fault, you were referred to Auxillis by Direct Line, to provide a suitable alternative vehicle on a credit basis. This was arranged as an alternative to claiming against your own comprehensive policy and incurred a loss of no claims and a liability to pay your policy excess.

I was never told there was an alternative and I had the choice of claiming with Directline. This wasn't mentioned or discussed with me. And I think this was deliberate.

Second point:

We would advise that in accordance with the terms and conditions of the agreement, it does advise that you are ultimately liable for the outstanding hire charges and your co-operation and assistance is required throughout proceedings which is why you have now been sent documentation requesting information necessary to pursue and support the need to hire a vehicle.

This is what worries me. How can I be liable if I had insurance in place for exactly this reason? How can my insurer land me this sort of trouble, given this is exactly why I have insurance??

What do I do now please? Do I have to submit the documents needed and go to court if needed to justify this? Can my insurer do something about this? What are my rights here? I wish I knew about this shady trick insurance companies play on consumers!! Aargh!


Thank you

Marie

The quickest way to double your money is to fold it in half and put it back in your pocket. :rolleyes:

Comments

  • ontheroad1970
    ontheroad1970 Posts: 1,657 Forumite
    1,000 Posts Fourth Anniversary Name Dropper
    Unfair as it appears you are not supposed to have car hire if you can afford to pay the upfront costs of so doing to claim back later.  This isn't always applied strictly,  but is theoretically a restriction.  For example, you should use a spare car at the house ahead of hiring one at the other party's cost.
  • sheramber
    sheramber Posts: 20,413 Forumite
    Tenth Anniversary 10,000 Posts I've been Money Tipped! Name Dropper

    When done through these third party companies it is not a courtesy car, which is what your insurance company offer- like for like.

    These companies arrange a car hire agreement, which you would have signed ,  agreeing to.   

    The other party want justification of the cost they are being asked to pay.




  • Aretnap
    Aretnap Posts: 5,380 Forumite
    Part of the Furniture 1,000 Posts Name Dropper
    Your financial situation is relevant because it affects what you can claim from the third party for a hire car, and therefore what the credit hire company can claim in your name.

    Basically if someone else has caused you a loss (eg by smashing your car up) you are entitled to claim reasonable costs that you incur as a result (like the cost of a hire car) from their insurers. But in turn you have a duty to keep those costs reasonable. You are not allowed to go out and hire the most expensive car you can find just because someone else is paying.

    In practice this means that if you have loads of spare cash lying around then you would be expected to go down to your local branch of Enterprise, hire a car yourself with your own money, then send the third party insurer a copy of the receipt and ask them to reimburse you. Because that's the cheapest way of hiring a car.

    However if you're skint you won't be able to afford to do that so you can use a credit hire agreement instead; this is more expensive but means you don't have to pay anything up front. And as part of the agreement you agree to help the credit hire company recover the cost from the third party insurer, eg by providing evidence of your finances. If they can't prove that you had a need for credit hire, they can only charge the third party insurer what Enterprise would have charged you.

    The advantage of using a credit hire agreement rather than simply claiming a hire car in your own policy is 1. no excess to pay 2. no reduction in your NCD while the claim is ongoing and 3. you get a like for like replacement car rather than the small runabout that many (not all) insurance policies would limit you to. You could have used the hire car on your own policy instead, however your insurer would still have needed your assistance to reclaim the costs from the third party before you could get your excess and NCD back, so you might well have been asked for your bank statements etc anyway.
  • itgirlinuk
    itgirlinuk Posts: 465 Forumite
    Part of the Furniture 100 Posts Name Dropper Combo Breaker
    Unfair as it appears you are not supposed to have car hire if you can afford to pay the upfront costs of so doing to claim back later.  This isn't always applied strictly,  but is theoretically a restriction.  For example, you should use a spare car at the house ahead of hiring one at the other party's cost.
    If I am not supposed to have car hire if I can afford it, why do they sell courtesy car as a perk of the insurance? And if I have paid for the perk, why shouldn't they provide for the car? And we don't have a spare car. This is the only car we have in the household
    The quickest way to double your money is to fold it in half and put it back in your pocket. :rolleyes:
  • itgirlinuk
    itgirlinuk Posts: 465 Forumite
    Part of the Furniture 100 Posts Name Dropper Combo Breaker
    Aretnap said:
    Your financial situation is relevant because it affects what you can claim from the third party for a hire car, and therefore what the credit hire company can claim in your name.

    Basically if someone else has caused you a loss (eg by smashing your car up) you are entitled to claim reasonable costs that you incur as a result (like the cost of a hire car) from their insurers. But in turn you have a duty to keep those costs reasonable. You are not allowed to go out and hire the most expensive car you can find just because someone else is paying.

    In practice this means that if you have loads of spare cash lying around then you would be expected to go down to your local branch of Enterprise, hire a car yourself with your own money, then send the third party insurer a copy of the receipt and ask them to reimburse you. Because that's the cheapest way of hiring a car.

    However if you're skint you won't be able to afford to do that so you can use a credit hire agreement instead; this is more expensive but means you don't have to pay anything up front. And as part of the agreement you agree to help the credit hire company recover the cost from the third party insurer, eg by providing evidence of your finances. If they can't prove that you had a need for credit hire, they can only charge the third party insurer what Enterprise would have charged you.

    The advantage of using a credit hire agreement rather than simply claiming a hire car in your own policy is 1. no excess to pay 2. no reduction in your NCD while the claim is ongoing and 3. you get a like for like replacement car rather than the small runabout that many (not all) insurance policies would limit you to. You could have used the hire car on your own policy instead, however your insurer would still have needed your assistance to reclaim the costs from the third party before you could get your excess and NCD back, so you might well have been asked for your bank statements etc anyway.
    Wow! I didn't know any of this and this was definitely not made clear to me that this is a third party and the excess / car hire agreement works differently. They told me this was what was going to happen and as I had paid for courtesy car as part of the insurance, I assumed it was what I was doing. They told me I don't have to pay anything as everything was covered by the insurance. And I pay for £0 excess as well on my policy.

    So, what do I do now? Do I declare all my financial details and can the court still make me pay for it? And I didn't get a more expensive car or anything. I got a like for like car and nothing fancier than that.
    The quickest way to double your money is to fold it in half and put it back in your pocket. :rolleyes:
  • tifo
    tifo Posts: 1,974 Forumite
    Part of the Furniture 1,000 Posts Name Dropper Combo Breaker
    edited 30 May 2023 at 10:42AM
    If the vehicle was supplied within the claim by direct line, and you had additional courtesy vehicle cover for this, then they should be dealing with the matter with the vehicle hire company and pay as you are covered for a courtesy vehicle if yours is not road worthy (this is different to a courtesy vehicle supplied when yours is being repaired). You say "had courtesy car agreement with my insurance" so I guess you had the additional cover which is usually added to the standard premium, like for example legal expenses cover and breakdown cover.

    With the current situation at court, the reason they are asking for your financial position at the time is that they need to assess whether you were impecunious, i.e. did not have the money to pay for a hire vehicle yourself, and thus entered into a credit hire agreement with auxilius. It's a standard part of your witness statement for the claim, i.e. what you want to say about it.

    I think you need to speak to direct line about it. You say "They told me ... I had paid for courtesy car as part of the insurance ... I don't have to pay anything as everything was covered by the insurance".

    1 week for a hire vehicle is a very short time and i'm surprised the third party is arguing about it. A hire vehicle is usually given up to 1 week after yours is written off or you receive payment and in this case you didn't even have that. It allows you to search for a replacement vehicle in that 1 week. Having a hire vehicle for 1 week more is usually accepted in court.

    I think the third party insurer will pay as soon as the claim is issued, they're not bothered about the additional cost of court fees. There's no valid reason they can argue in court.

    In larger claims some insurers go almost to a hearing and settle, after much work has been carried out by solicitors for both sides, paying thousands more in the claim. This is part of the reason for higher premiums. It's not all drivers fault.
  • DullGreyGuy
    DullGreyGuy Posts: 14,055 Forumite
    10,000 Posts Second Anniversary Name Dropper
    Aretnap said:
    Your financial situation is relevant because it affects what you can claim from the third party for a hire car, and therefore what the credit hire company can claim in your name.

    Basically if someone else has caused you a loss (eg by smashing your car up) you are entitled to claim reasonable costs that you incur as a result (like the cost of a hire car) from their insurers. But in turn you have a duty to keep those costs reasonable. You are not allowed to go out and hire the most expensive car you can find just because someone else is paying.

    In practice this means that if you have loads of spare cash lying around then you would be expected to go down to your local branch of Enterprise, hire a car yourself with your own money, then send the third party insurer a copy of the receipt and ask them to reimburse you. Because that's the cheapest way of hiring a car.

    However if you're skint you won't be able to afford to do that so you can use a credit hire agreement instead; this is more expensive but means you don't have to pay anything up front. And as part of the agreement you agree to help the credit hire company recover the cost from the third party insurer, eg by providing evidence of your finances. If they can't prove that you had a need for credit hire, they can only charge the third party insurer what Enterprise would have charged you.

    The advantage of using a credit hire agreement rather than simply claiming a hire car in your own policy is 1. no excess to pay 2. no reduction in your NCD while the claim is ongoing and 3. you get a like for like replacement car rather than the small runabout that many (not all) insurance policies would limit you to. You could have used the hire car on your own policy instead, however your insurer would still have needed your assistance to reclaim the costs from the third party before you could get your excess and NCD back, so you might well have been asked for your bank statements etc anyway.
    Wow! I didn't know any of this and this was definitely not made clear to me that this is a third party and the excess / car hire agreement works differently. They told me this was what was going to happen and as I had paid for courtesy car as part of the insurance, I assumed it was what I was doing. They told me I don't have to pay anything as everything was covered by the insurance. And I pay for £0 excess as well on my policy.

    So, what do I do now? Do I declare all my financial details and can the court still make me pay for it? And I didn't get a more expensive car or anything. I got a like for like car and nothing fancier than that.
    They may not have told you verbally but they will have given you a credit hire agreement to sign when you got the car which would have outlined all of this to you. Unfortunately people have a very bad habit of signing things without reading what they signed.

    So this potential court case is between you and the other driver, the court will only determine what the other driver owes towards your credit hire bill. 

    The normal wording of credit hire agreements state that if you continue to support them, dont commit fraud etc then your bill is limited to what the court orders the third party to pay... ie you dont pay any shortfall. If however you refuse to cooperate with them then often that moves the goalposts and means you become liable for the shortfall. So assuming you dont want to be paying anything then yes you should honestly declare your financial position to them and anything else they ask for to support the claim.

    Clearly if you refused to help them and then refused to pay the bill then a different court case would happen for the hire car company to recover the shortfall from you. 

    You dont mention what vehicle you have/what hire car you had but 1 weeks hire is fairly unlikely to ultimately end in court... you will however find stories of people have a £1,000 wreck of a car (before the accident) and they run up £40,000 credit hire bills have a brand new hire car for months.

    tifo said:
    1 week for a hire vehicle is a very short time and i'm surprised the third party is arguing about it. A hire vehicle is usually given up to 1 week after yours is written off or you receive payment and in this case you didn't even have that. It allows you to search for a replacement vehicle in that 1 week. Having a hire vehicle for 1 week more is usually accepted in court.

    I think the third party insurer will pay as soon as the claim is issued, they're not bothered about the additional cost of court fees. There's no valid reason they can argue in court.

    In larger claims some insurers go almost to a hearing and settle, after much work has been carried out by solicitors for both sides, paying thousands more in the claim. This is part of the reason for higher premiums. It's not all drivers fault.
    The norm used to be 5 working days from receiving settlement... in theory a total loss payment could be paid by FasterPay on the day of notifying the claim, certainly heard of people having offers same day. Many others are much slower as they involve engineers and want to see docs etc.

    The OP states that this is a bus company, if its the likes of Arriva, Stagecoach etc then many of these deal with claims in house rather than their insurer dealing with it. In my experience they tend to be a bit more hardball in approach than volume personal lines insurers who put a reasonable weight on operational efficiency when decision making 
  • Herzlos
    Herzlos Posts: 15,088 Forumite
    Part of the Furniture 10,000 Posts Name Dropper
    You could certainly state that given you have no idea how long the car was needed and how expensive rental cars are, that no you couldn't have reasonably done it yourself.

    You may have been able to pull money for a 1 week rental onto a credit card, but could you reasonably have afforded a 3 month rental? Most of us couldn't.

    They likely just want evidence to present in the claim against the 3rd party.
  • tifo
    tifo Posts: 1,974 Forumite
    Part of the Furniture 1,000 Posts Name Dropper Combo Breaker
    It's more likely that the other insurer will settle the credit hire vehicle charges soon, can't see it going to a hearing for a 1 week hire. If you hired a like for like vehicle then they'd have to pay, despite the cost. It can be argued if your vehicle and the hire vehicle were very high in value that did you need like for like, and we're talking Ferrari or Bentley etc but otherwise it's no issue. Even if you had an Aston Martin or Rolls Royce you could argue that you need it for your image and travel etc as that's what you're used to.

    The impecunious statement is part of the paperwork, it's unlikely to get used as the claim is likely to be paid.
  • itgirlinuk
    itgirlinuk Posts: 465 Forumite
    Part of the Furniture 100 Posts Name Dropper Combo Breaker
    Thank you for taking the time to respond. To answer one of the questions raised above - we had a Mazda 3 and our replacement vehicle was similar hatchback 5 door. Nothing fancy and definitely not a new luxury car. It was slightly scratched and dented. 😂

    I spoke to Directline today and asked them all the questions you have all raised and all the doubts I had. 

    Directline has confirmed that there will no way they can claim against me for these hire charges. They need me to submit my bank statements and things, but have asked me to put it in writing that you didn't have an option but to hire the car via Auxillis as Directline only deals with them for supplying a replacement vehicle. The courtesy car they provided is included in the insurance and they always instruct Auxillis to deal with the hire details.

    According to Directline, the credit agreement I signed with Auxillis should state that "as long as I cooperate with Auxillis's court proceedings and supply supporting information as requested, they will not ask me to pay up for the charges" But the agreement that I have seen so far doesn't mention anything to this effect. 

    Directline has put their position as stated above in writing. They have asked me to email Auxillis to send the credit agreement and highlight the section where they say I won't be responsible. 

    I still don't understand why I have to deal with this and not Directline themselves, but as I signed the credit agreement, it's my job apparently. Directline has said this probably will settle out of court and I wouldn't have to make an appearance in court.


    The quickest way to double your money is to fold it in half and put it back in your pocket. :rolleyes:
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