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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Credit Hire Bill of £400k new
Credit Hire Bill of £400k new