Please find below some frequently asked questions, which will help you better understand the accident claims and credit hire process.

What is accident management?

Accident Management is the centralized handling of a motorist’s claim following a road traffic collision. It is a cost-effective intermediary service that assists drivers in getting back on the road quickly and relieves the stresses of going through the claims process alone. Whilst it is significantly more cost-effective for the innocent motorist, the service does cost slightly more as a result – a cost borne by the insurer of the ‘at-fault’ driver.

The term “accident management” encompasses a whole host of services; which may include 24-hour vehicle recovery, damage assessment, replacement car provision, arrangement of vehicle repairs, liaising with insurers, uninsured loss recovery, personal injury assistance and help with paperwork.

It is a particularly useful service for vehicle fleet operators, who need to keep downtime to a minimum. An outsourced accident management service can save managers time and administration costs.

Accident management in the uk

The accident management industry came about in the 1980s to address the problem of innocent motorists having to pay upfront for a replacement car after a collision, and wait weeks or even months to be reimbursed by the at-fault party’s insurer.
The service quickly proved popular with non-fault drivers, who were not getting this service from their insurer.
In the years that followed there were legal challenges by insurers on issues including costs, validity of claims and adherence to existing law. Now the rates insurers are willing to pay are set out in the General Terms of Agreement issued by the Association of British Insurers.

Accident management companies obtain their work from a range of sources, including motorists, breakdown companies, Bodyshops, insurance brokers, fleet managers and dealerships.
The reputation of the accident management industry has been damaged in recent years by the competitive ambulance chasing tactics adopted by some firms to capture motorists’ personal injury claims.
Many accident management companies deal only with non-fault motorists but recently the industry has started to see the emergence of fresh customer-friendly firms which assist all drivers, regardless of fault, and help independent bodyshops to access more direct repair work. Today there are over 34 million vehicles on Britain’s roads and over 43 million licensed drivers.
Please Note: The content in this section and the above was taken from “wikipedia” the Worlds Factually Recognised Website for Non-Biased Information. They cover all the features involved in a Non-Fault Accident Management Package so please take the time to view as Free Factual Knowledge can be very beneficial. Read the full article here

Why should I use a accident managent company

This is the most common question and one I would have asked myself. Consumers assume that because they have paid for an insurance policy every eventuality will be taken care of and in their best interests. This is not the case.

When an accident is our fault we know we are going to pay the excess, we know our no claims bonus is history and we are ok about this because it’s better than the financial alternative especially if the accident is a bad one.

The issue here is do we want to lose our no claims bonus and pay our excess if the accident is not our fault? The answer to that is NO. The problem however is that we do end up losing our No Claims and paying our Excess along with a lot of other things that should not happen.

We are fobbed off from the moment we make the call something that will not happen if you enlist the services of a reputable Accident Management Company.

I have not heard of accident management before

I’m sure you have heard the phrase “ignorance is bliss” well that’s a phrase that could be applied here. Accident Management is not something you would know about unless you went looking for it. If you did go looking for it then you would by default come across all the horror stories written by folk who have previously suffered at the hand of their insurance companies.

Consumers that have been treated unfairly in the past actively go looking for a good Accident Management Company, as they do not want a repeat of the experience they last had with their insurance company.

The TV and Radio is full of adverts offering you an advance on your so-called claim. These are Solicitors not Accident Management Companies it’s important that you don’t confuse the two.

If the accident was my fault can you still help

If the Accident was 100% your fault then ring your insurance company and let them know. This is why you took out insurance in the 1st place. They took your money they now have to deal with it.
Never admit liability at the scene and always talk to someone like us prior to admitting guilt. You may not be in the wrong so find out by people who know first.
We can help in that respect but not if you’re found to be at fault.

Will I get a fair valuation for my vehicle

Yes you will get a fair valuation for your vehicle. We use an independent body of Engineer Inspectors none of which work for Insurance Companies with a brief to save them money.

Even if your vehicle is modernised then these modifications will be accounted for and added to the cars worth. If you have a car that is more than 10 years old and with a book price of £150 then that is all the insurance companies will value it at. They ignore the £4000 worth of customisation. With us it is different; everything will be noted and accounted for.

What does your service cost me?

We do not charge our customers for our services. We earn solely through the supply of the hire vehicle , the cost of which is recovered under our agreement with the fault driver’s insurer.

Can I still make a claim if the other driver wasn't insured?

Don’t worry, we can still help you, we can recover your costs from the Motorist Insurers' Bureau (MIB), an organisation that exists to compensate any innocent party who has been involved in an accident with an uninsured driver.

How long am I allowed to keep the replacement vehicle for?

If your own car is repairable then until the repairs are complete or in the event of it being a write-off our agreement on your behalf with the Association of British Insurers allows for the hire car to be supplied to you for up to seven days from the day your settlement cheque is received.

What is "credit hire" and when is it used?

Credit hire is the supply of a like-for-like replacement hire vehicle on a credit basis to the not-at fault vehicle owner following a non-fault accident. Rather than paying for the hire of the vehicle at the time of hire, the credit hire company will attempt to recover the costs of hire from the at-fault driver's insurer once the claim is settled. Credit hire may be available to any non-fault vehicle owner whatever their own insurance status - comprehensively insured, third party insured or even (in many cases) uninsured as the claim is not against their own insurance but directly against the the insurer of the at-fault third party driver.

Are credit hire agreements legally enforceable?

Most credit hire law comes from two cases: Clark v. Ardington [2002] EWCA Civ 510 and Lagden v. O’Connor [2003] UKHL 64, In Clark the court held that a credit hire agreement could be valid, enforceable and exempt from the Consumer Credit Act. If a credit hire agreement complies with the Consumer Credit (Exempt Agreements) Order 1989, then it is likely to be valid. This requires the debt to be paid in not more than four instalments, less than twelve months from the date of the agreement. Most challenges to the validity of credit hire agreements are generally unsuccessful provided the agreements comply with the above and a challenge against an agreement per-se is a rarity. Legal challenges now tend to focus on the circumstances in which the claim is made and the amount being claimed.

When is a credit hire possible?

Credit hire should only be taken:

1. If there is no doubt as to liability.
For the duration of the period of loss of use of the damaged vehicle. Please note that if the vehicle is safe and drivable this may only be for the period during which repairs are actually being undertaken (see "duration of hire" below).
3. The driver has no other equivalent "spare" vehicle available and without depriving another driver (usually spouse or partner) from using it; and
4. In theory at least, the driver could not have obtained or paid for an alternative vehicle without suffering any financial impediment (i.e. they had spare money they did not need for anything else).

Where (and why) do problems with credit hire arise?

From a consumer point of view the problem is that the contract is between the credit hire company and the owner of the vehicle involved in the non-fault collision. The owner of the damaged vehicle enters into a contract whereby they hire the vehicle from the credit hire company on the basis of a credit agreement - with the bill payable at a future date and the costs recovered directly by the credit hire company from the at-fault driver's insurer.
Credit hire works on the basis that the payment will be recovered from the at-fault driver's insurance company and no charge will be payable by the (non-fault) recipient of the hire.

Why are credit hire rates so high compared to normal rates?

The credit hire industry body argues that while spot hirers take no risk as to settlement by being paid up-front, the credit hirer takes all the risk as to their bill being settled at end of claim - which could be several months hence or in some cases, never. Their charges also need to include an element to cover the costs of the credit and sufficient margin to cover cases where costs are not recovered.

Furthermore they need to have a wide range of instantly-available replacement vehicles to hand and these need to be delivered nationally at all times of day and night.

Credit hire rates are regulated and agreed rates are set by agreement between the credit hire companies and the Association of British Insurers:

They are higher than spot rates but provided that the various other issues dealt with in this FAQ are appropriately dealt with then all participating insurance companies (see above link) should settle claims.
In all circumstances make sure any company you use is "First Tier ABI" - see above link for more information.

How do most people come to use credit hire companies?

Most people are contacted by an "accident manager" having had their details passed on by their own insurer after they informed them of a non-fault accident. "Accident Managers" and "Accident Management Companies" are usually either credit hire companies themselves or they will be referring your case to a credit hire company.
Just because your insurer has "referred" you to them does not mean you should enter into the agreement blindly — nor do you have to accept your insurer's recommendation.

If you are offered a replacement vehicle following an accident the questions to ask before delivery are:

Is this a "courtesy car" or a credit hire vehicle?

In what circumstances is it possible I could be held liable for the payment of the hire or use of the vehicle?
The answer to the latter should be "only if you deliberately deceive us as to the circumstances of the accident and your personal position."

Some credit hire companies will cover the entire risk of providing the credit hire (and any loss — in court if necessary) except in the case of deliberate fraud. Find one of them — or ask me.
When should I not accept a credit hire vehicle?

If there is any doubt as to whether the other party is 100% liable.

If the damage was minor and your vehicle is drivable (you will not be entitled to a hire vehicle except for the actual period during which the repair is undertaken).

If you have an equivalent vehicle you would not otherwise be using (and would not be depriving another person of using - such as your spouse or partner's car)

arguably, if you have the means to hire an equivalent vehicle for the full period necessary without suffering any deprivation (deprivation being in the legal sense - that you had no other possible need/use or future use for the money).

What is the difference between a credit hire vehicle and a courtesy car?

A credit hire vehicle might be hired to you following a non-fault accident by a credit hire company. It is normally provided on a "like for like" basis following loss of use of your own vehicle and payment is subject to a credit agreement which you enter with the credit hire company. If all goes well the payment for the hire should be recovered directly by the credit hire company from the insurer of the at-fault driver(s). In some circumstances you could be liable for any charges made under the agreement that they cannot recover.

A "courtesy car" may be provided while your car is repaired and may be funded by your insurance policy or by agreement with the third party insurer. Courtesy cars are normally "stock" vehicles often provided by the repairing garage. They may be offered following non-fault, split liability and at-fault accidents. In the case of split liability and at-fault cases they may be costed into your claim on your comprehensive policy and hence might be chargeable against your policy excess.

Be wary of accepting a credit hire care if liability is in any way in dispute.

Unless you have specific cover always question if there will be any cost implication of a "courtesy car" if the accident is likely to be split liability or you might be found to be at fault — particularly if the cost of repair(s) is close to your policy excess.

Always declare any entitlement to a "courtesy car" to the credit hire company - even if you were not at fault in the accident and the car on offer as a courtesy car is not "like for like".

I was in an accident which was not my fault. Am I entitled to a replacement vehicle?

Generally speaking the law provides that if you suffered damage or injury wholly caused by another person you should not be disadvantaged in any way.

However the law says your need for a replacement vehicle is not a given. In most circumstances showing the need will be easy to satisfy but you may not be entitled to a replacement vehicle if it can be shown that yours was not needed for the period of repair.
Circumstances where this might apply might include:

If you were to be on holiday abroad and the vehicle concerned was to be parked up for the entire period of the repair.

If your car was damaged but you had another of equivalent quality available for your sole use parked in your garage
The need for a hire car is not self-proving (Giles v Thompson [1994] 1 AC 142 per Lord Mustill at 167).
However a need for use is no defence in these circumstances. If you can show a potential requirement for use — ie that you may have wished to use the vehicle but could not as no car was available (or did not even if one was) then the loss of potential use is likely to be enough.

I was in an accident which was not my fault. Am I entitled to a like-for-like vehicle?

Generally speaking the law provides that if you suffered damage or injury wholly caused by another person you should not be disadvantaged in any way. Thus if you drive an Aston Martin which is damaged in a collision which is not your fault then you should should be provided with a vehicle of equal prestige and not asked to accept the body-shop's Micra while yours is off the road.
The converse equally applies. If your Micra is damaged and a credit hire company offers you an Aston Martin the insurer of the at-fault driver cannot be expected to pay the additional hire costs. Falsely "upgrading" you is a well established scam. Never accept a credit hire vehicle which is better than the vehicle it is replacing unless the hire company guarantees in writing that it will be charged to the third party at the same rate as your own vehicle. Failure to do so can leave you picking up their bill.

Credit hire case: Why am I named as defendant or claimant?

As with all aspects of a road traffic accident the claim is between the parties to the accident. Thus even if your insurance company (or another party) is fighting the case on your part they may well be doing so on a subrogated basis. This means they incur the costs and risks of the action but they are not named as a party to it on a formal basis.

Credit hire case: what is my risk of having to pay a credit hire bill personally (I was at fault)

Almost none – unless you were uninsured. You may well be named as a defendant in a case which is why this question arose. But your case is likely to be subrogated and any legal costs or costs or penalties imposed by the court met by your insurer. We usually see these cases when there is a minor collision when the owner of the other vehicle has been provided with a credit hire they did not need at great cost. If they are using a bad credit hire company then the financial risk to them is far greater than it is to you. Send all information received to your insurance company. If you feel you need assistance or wish to have free, private consideration of your case contact me through the "ask Lucy" section of this website.

Credit hire case: what is my risk of having to pay the credit hire bill (they were at fault)

Any reputable hirer – and that does not necessarily include the largest or best known – will provide the hire car at their risk. You should only face risk of personally covering it if you have misled them in any way. Regrettably credit hire is sufficiently profitable that many bad practices have developed. If you should not have been provided with a credit hire vehicle in the first place because the degree of damage did not warrant it, if the repair was unreasonably delayed, if a better vehicle was provided than that which was damaged or if you were found to be responsible you may be asked to pay all or part of the costs of hire.

What should I do if I am involved in a crash?

All policyholders must pass all third party/court corres to their insurers as soon as it is received, under policy conditions.
Also in accordance with policy conditions, it is entirely a matter for insurers as to how the summons/ third party claim is dealt with.

What should i do if i am sued because my insurer refused to meet the third party claim in full, in particular any excessive hire car costs?

Your insurers will have to pay any unsatisfied judgement handed down by a County Court, in accordance with the requirements of the Road Traffic Act. If costs to your insurers should be increased by her failure to allow them to deal with this claim, they may be entitled to seek reimbursement from the policyholder.
Generally, third party insurers are there to deal with all aspects of third party claims. There should never be any need for 'Accident Management Consultants' and by employing them you can waive your rights under your insurance contract with your insurer.

The fact that the third party claim may look suspicious is irrelevant to the immediate action required of the policyholder. This must be referred to your insurer. Do not attempt to deal with it yourself.

However, if you somehow breached the terms of your insurance, or are in dispute with your insurers over a breach, and that is the reason why the insurer will not pay the third party. And that is a very good reason to take out a legal protection policy right now so you have the back up should you ever need it.

Still have questions that need answering? Contact us.