Meant to post about this a few days ago when I first saw it but forgot. It's since appeared in mainstream media and been posted over on HJ:
www.lawgazette.co.uk/news/claimants-400k-car-hire-bill-a-stark-warning-to-reckless-providers/5101973.article
Woman involved in accident in which she says another car reversed into her. Driver of that car says he wasn't even in it at time as he was investigating a suspect tyre and that she drove into his stationary car.
She takes a hire car via accident management company and keeps it three years running up a bill of £400k.
Case finally gets to court and she loses.
The judge's decision is downloadable from the gazette page.
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And she had insurance though to cover the ultimate cost!
Sounds like a scam and fraud.
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Nobody has lost £400k. Even if they wrote off the value of the car that'd still only be around £20k and I'm sure the car does not have zero value.
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>> Nobody has lost £400k.
I think the hire company who'd hoped for that sum as profit might beg to differ.
Unless Ms Harries has 'After Event Insurance' or a lot of equity in her home they're going to have to whistle........
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Pay attention to the difference between "lost" and "failed to gain".
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I have worked with several credit hire companies and would consider most to be totally reputable and a couple very much so.
They play the odds, they know that many claims will be rejected which is why they charge several times the standard hire rate and to account for the potential cost of capital (i.e. interest that they are not getting). Credit hire rates are agreed by the Association of British Insurers and all the companies that I had dealings with used the agreed rates.
If the hirer is totally honest, but still loses the case, all of the credit hire companies that I have worked with will write the hire off. They will not pursue the hirer.
There is also quite a checklist that they go through to check suitability of the hirer, including checking available cash - from bank statements (you can't credit hire if you can afford to replace the car from your own funds).
Often credit hire companies wait between 2 and 4 years to get paid and they do not raise a VAT invoice until the claim has been agreed otherwise they would be paying VAT at 45 days on average), so the is no invoicing to write off but there are costs of doing business (getting the car, insuring it etc.) that will need to be absorbed.
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>> I have worked with several credit hire companies and would consider most to be totally
>> reputable and a couple very much so.
>>
>> They play the odds, they know that many claims will be rejected which is why
>> they charge several times the standard hire rate
You consider that to be totally reputable?
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If you read the judge's decision, evidence presented to the court showed that witness statements supporting the claimant all came from individuals who had a connection to the credit hire company and the garage where the claimants car had been recovered to after the collision.
Insurance fraud IMO.
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>> I have worked with several credit hire companies and would consider most to be totally
>> reputable and a couple very much so.
>>
>> They play the odds, they know that many claims will be rejected which is why
>> they charge several times the standard hire rate
And then some. Reputable it is not. It exposes the claimants to a great deal of worry in some cases, whether they are eventually pursued or not. The rates are so high because big bungs are paid to the non-fault insurer via their claims management entity in many cases whom they use to extract money from other insurers. The problem is they are all doing it to each other and this wasteful activity is ultimately paid for by policyholders.
I refuse to use claims management companies. The last non-fault I had, I contacted the third party's insurer direct and they hired me a car from Enterprise on a day rate of about £16 (I saw the invoice). Around the same time my son had a similar non-fault and got a credit hire car that was £100 a day. Of course he had to sign to agree that if the third party or their insurer did not pay he would be liable. How is that reputable?
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>>Reputable.
All the firms that I dealt with were independent - i.e. not owned by any insurance company. We walked away from a number of companies that were not reputable.
They got paid about 1 in 4 times. Plus they had to bear the cost of sourcing the vehicles, running the business, borrowing money to stay in business etc. The compound interest on an unpaid hire bill ramps up quickly. I recall net profits were c2% to 3% of turnover.
They used industry agreed hire rates. Agreed by the insurance companies' trade body. Again, we walked from firms that used rates in excess of the ABI rates.
They provided a service to people that didn't qualify for a curtesy car and had no other means of getting a temporary replacement. A lot of customers were sole traders who's vans were damaged etc. Should innocent victims in an accident be left without transport if they don't have the means to get a temporary replacement - remember they have the right to be put in the same position as they were before the accident?
The credit hire companies all did due diligence. They looked at claims, got financial details from the renter etc.
Remember, you should not be offered credit hire if you can afford to hire a temporary vehicle yourself. This is the very first test undertaken by reputable credit hire companies.
Not one company that I dealt with pursued an individual for the hire where a claim was lost, settled "50/50" or "knock for knock" by the insurance company and only did so where there was clear evidence that they were lied to. We used to get monthly KPIs from the businesses and the number of charges to the hirers was about 1 a month from hundreds of hires and was where the credit hire company had clearly been deceived.
I have personal experience of a bad credit hire company owned by a major insurer. They insisted Mrs Z get a credit hire car despite her having £20k in her current account. If it went to court then the credit hire co would not have got their money from the 3rd party as Mrs Z had the means to temporarily replace the damaged car. In the end we rented a car from Enterprise at £35ish a day.
Last edited by: zippy on Tue 12 Nov 19 at 00:37
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The only ones I or my family have had experience of have never asked whether we could afford or whether we needed a replacement car. My son would have needed one anyway but a C1 would have done - they provided him with a Focus at £100 a day to stand in for his Panda.
I suspect that is the most common experience. The claims management people who organise these are also promoting personal injury claims.
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>> They used industry agreed hire rates. Agreed by the insurance companies' trade body.
Why on earth do ABI think sums around £100/day should be approved?
My accident with Roomie was indisputably my fault so nobody to claim from. Cost of hiring a Hyundai i20 for a week cost far less than two days at ABI daily rate. Web comparison offers mean that wasn't exactly a rack rate but equally LV could have negotiated a deal way below that either for no fault or as a add on.
If ABI is approving usurious rates it's part of the problem.
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Our Picasso has been in the body shop last couple of weeks after it was scraped in a carpark - fortunately the 3rd part left their details. After they reported it their insurer, AA, they were on the phone almost immediately offering to sort it, and a courtesy car, which would be provided by Hertz, and they were at pains to point out that it was much cheaper than Credit Hire. A Qashqai was provided at about £25 / day, and our car was sorted no problem. A thumbs up for an insurer!! Suppose we should report it to our insurer so they can put the premium up next year....
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>> Our Picasso has been in the body shop last couple of weeks after it was
>> scraped in a carpark - fortunately the 3rd part left their details. After they reported
>> it their insurer, AA, they were on the phone almost immediately offering to sort it,
>> and a courtesy car, which would be provided by Hertz, and they were at pains
>> to point out that it was much cheaper than Credit Hire.
Exactly, I have done this twice, they can't move fast enough to sort it. So why would one's own insurer automatically push it to claims management resulting in a £100 a day cost to the TP insurer when the question of whether you can afford to hire your own replacement has never been raised? Because they get a bung, no other reason. And you would have had to sign some sort of indemnity. It's bent, in equity if not in law.
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It depends where you draw the line between cynical and disreputable, I think.
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In case highlighted here there wasn't even an actual accident:
www.lawgazette.co.uk/news/fundamental-dishonesty-found-against-non-attending-claimant/5102119.article
Defendant, who one must conclude was part of plan, was too stupid to clock that his insurance tracker box would record fact is car was parked, ignition off, at time of alleged crash and it was some miles from locus.
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A car run up the back of my 2 week old car. Time for repair I called the 3rd party insurer and asked for a hire car - the offer was a small Fiat from the body shop - doing 400+ miles per week it was unacceptable - I asked for a Focus sized car.
Clerk @ Insurer refused at first until I pointed out I would hire a car from Enterprise for say £60/ day and Norwich Union would pay under £30 - I asked for them to cover the hire car insurance directly so I would not have daily excess charges......... the 5 day repair took 10 days as the minor bits & pieces such as car badges etc were not in stock @ Honda. New model & stocks of spares was tricky.
They still managed to put the wrong badges on the car - fixed at the 3rd attempt!
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Credit Hire Bill of £400k - Bobby
