Car Hire following a collision

Tickdick00

Pretty annoyed at the moment - yesterday afternoon a car pulled out of a side junction immediately in front of me and I didn't have time to brake. She has admitted liability as she got her flip flop caught under the throttle pedal and couldn't brake (you couldn't make it up....) Police attended and gave her a reprimand for her choice of footwear.

A couple of months ago I had decided to get myself a nice car before retiring so bought a brand new electric Hyundai Ioniq 6 I've had it three weeks and now this....  The car is likely to be off the road for a couple of months, and my insurer has said I am entitled to a small hire car. That said I am told I may be able to apply for a like for like replacement (ie large electric car) as the driver and insurer have admitted responsibility. (We're off on holiday in a couple of weeks so a 3 door city car won't cut the mustard.)

Somewhere in the back of my mind I remember an article where there was a warning about this as liability for the cost of car hire could be mine if her insurers change their mind about liability. (As far as I'm concerned it's a clear cut case - two independent drivers as witnesses, and two lots of dash cam footage, and her insurers have phoned me to admit liability)

If I am right (or wrong) could somebody please jog my memory as to the legal advice I should refer to? Thank you for your help. (sorry, but pretty shook up about the incident and I'm not thinking as clearly as I should)

Woodstok2000

If you use a credit hire company you will need to sign a credit agreement to cover the costs of the claim and if they cant recover that from the third party you become liable. They likely won’t take the case unless they are pretty sure they can recover so the chances of costs falling back on you are slim but never none so just bear that in mind.

You could also approach the third party insurer directly and claim from them directly. Most insurance companies will be regulated and complaints can be escalated to the Financial Obudsman Service if things go wrong while some credit hire companies may be regulated by lesser known entities so something to consider also.

Aretnap

If you use a credit hire company you will need to sign a credit agreement to cover the costs of the claim and if they cant recover that from the third party you become liable. They likely won’t take the case unless they are pretty sure they can recover so the chances of costs falling back on you are slim but never none so just bear that in mind.

This is not correct, and not it's how credit hire works.

You have to be liable for the full cost of the hire car for it to be reclaimable from the third party - you can't make a claim for an expense that you didn't actually incur. However not many people have the cash lying around to just pay upfront for open-ended car hire. So the credit hire company provides a car on credit and sends you a bill for the cost. You then take that bill and claim the amount you've been charged from the third party, and you only have to repay the hire company once the third party has paid you.

(In practice the credit hire company will do most of the work of claiming from the third party on your behalf, and the actual payment probably gets paid directly from the third party insurer to the credit hire firm, but in theory at least it's you claiming from them in your own name)

That leaves the question of what happens if the third party insurer can't be made to pay the full bill, either because they've successfully disputed liability, or the amount of the costs. The credit hire company doesn't actually want to be charging its customers thousands of pounds for car hire, as they won't get much more business if they do that. So in nearly all cases they will simply write-off any shortfall. Usually by means of a clause in the agreement which says that your liability is limited to the third party's liability - in other words the amount that you have to pay them is capped at the amount that can be recovered from the third party on your behalf.

The only exceptions to this principle are generally where you mislead the credit hire company about the circumstances of the accident, or where you refuse to cooperate with them when it comes to claiming the money from the third party insurer.

So no, you will not have to pay the cost of the hire car yourself, even if the third party changes their mind and denies liability, so long as you don't do anything silly.

Car_54

https://forums.moneysavingexpert.com/discussion/comment/82103660#Comment_82103660

Be aware that if you claim from the TP insurer, and things go wrong, you CANNOT escalate to the FS Ombudsman. They only act on disputes between insurers and their customers, and in this scenario you are not a customer.

IOWJJBTM2025

My experience - Just contact 3rd party insurance. Had a very good experience with this method when my son had a person run into the back of his car. His car was written off and they paid out very quickly. They advised that it was in their interest to sort out so they did not run up large bills for hire cars etc.

Long story short - his own insurance transferred him through to a claims handling company who were just trying to make as much money as possible out of the situation instead of getting my son back on the road again.

One negative - last month my son went out for quotes for his car insurance renewal - he now has earned two years NCB and getting older so costs should be coming down. On first try he omitted to advise that he had been involved in an insurance claim just over two years ago. After he updated the quotes to include he had been in a no fault accident the cheapest premium went up by £250 even though it was proven to be a no fault claim and the other insurance paid out in full.

Mildly_Miffed

No argument about liability, so straight to the other driver's insurance. Don't claim from yours, just inform them.

facade

If you go through your own insurer, won't they just write it off and buy you a brand new one- which you can have on Tuesday? They you'd only need pursue the third party insurers yourself for your excess (if your own insurer really insists that you pay it rather than just claim for the whole amount).

A "couple of months" contract hire plus more than a few light scratches would make writing it off and replacing with a new one more economical.

Most insurers offer a brand new replacement car if you manage to write it off in the first 12 months.

MyRealNameToo

https://forums.moneysavingexpert.com/discussion/6679859/car-hire-following-a-collision

There are three routes open to you…

1… Allow your insurers to sell pass your to a credit hire firm, may be a house hold name like Enterprise as most companies do offer credit hire. Ultimately you need to read the contract, and the language may be convoluted, but in normal circumstances the only way you can be held liable is if you staged the accident, you refuse to give the car back when instructed or you refuse to assist them in recovering their outlay. If you run up a £50k bill and they only get £2k back that is there problem not yours as long as you are sending them bank statements and turning up to court when they ask etc.

2… Hire the car yourself and reclaim the cost, obviously this one can leave you carrying the cost if something goes wrong and its also difficult to hire a car when you dont know when it will go back

3… Approach the third party insurer, you can get them to do the whole claim or just the hire car element if you want. Again the only time you can become liable is if they decide the accident was staged or you refuse to give the car back when instructed.

3 is the lowest risk option, and most insurers will bend over get you to take it as long as there are no liability or indemnity queries outstanding. With 1 you will be given a like for like car, with 3 they will often try and get you to take something cheaper, reminding you of your legal obligation to mitigate your losses, but dont put up much of a fight if you explain clearly why the proposed vehicle class isnt apprioriate for your needs.