What is Credit Hire?
Credit hire refers to a service provided by accident management companies that allows a non-fault driver to obtain a replacement vehicle on credit terms after a road traffic accident. The company then seeks to recover the hire costs from the insurance company of the driver responsible for the accident. This service helps the non-fault driver stay on the road without paying for a replacement car upfront to ensure that the at-fault driver’s insurer covers the costs.
Evolution of Credit Hire
The concept of credit hire began in the 1980s, aiming to help non-fault drivers quickly regain mobility after an accident. Over time, it has evolved to offer greater protection for non-fault drivers and minimize their financial burden. Today, credit hire is an established part of the insurance industry, supported by accident management companies and governed by general agreements like the General Terms of Agreement.
What is a Credit Hire Company?
A credit hire company is an organization that provides replacement vehicles to non-fault drivers after an accident. This service is typically offered as an alternative to using the driver’s insurance policy, where the accident management company takes on the cost of the replacement vehicle and seeks reimbursement from the at-fault party’s insurer.
Some credit hire companies provide replacement vehicles as well as credit repair services. These services arrange and fund the repairs for your vehicle, recovering the costs from the at-fault driver’s insurer.
How Does Credit Hire Work?
The accident management company will provide a replacement vehicle once it is determined that you were not at fault for the accident. The hire charges are not paid upfront by you. Instead, the management company will bill the at-fault driver’s insurer for the costs of the hire once liability is admitted.
The process typically involves:
.Vehicle replacement: You are provided with a comparable vehicle while yours is being repaired.
.Claiming the costs: The accident management company coordinates with the insurers to recover the hire costs from the at-fault party.
.Return of vehicle: Once your car is repaired or you have received compensation for a total loss, the hire vehicle is returned, and the total costs are submitted to the insurers of the liable party for reimbursement.
Benefits of Credit Hire Companies
.No upfront charges: You do not need to pay anything out-of-pocket when hiring a replacement vehicle.
.Liability on the faulty driver: The credit hire company pursues the at-fault driver’s insurance to recover the hire costs.
.Protection for no-claims bonus: Since the claim is made directly against the at-fault party’s insurer, your insurance policy and no-claims bonus remain unaffected.
.No excess fees: Unlike claims through your insurance, there are no excess fees to pay.
.Comparable replacement vehicle: You receive a car of similar size and specification for the repair duration.
.Avoiding insurance premiums: Using a credit hire company helps you avoid increasing premiums or losing your no-claims bonus.
Credit Hire Claim
A credit hire claim in the UK refers to a situation where, after a non-fault accident, the claimant rents a replacement car from a credit hire company. The insurance company of the driver at fault then claims the costs of this hire, allowing the claimant to avoid paying the upfront hire costs themselves.
Duration of Credit Hire
The duration of credit hire depends on the circumstances surrounding the accident, with courts considering the reasonableness of the hire period. The limitation for credit hire claims in England and Wales is typically six years from the accident date. If an injury occurs, the time frame for making a claim is generally three years from the accident date.
Credit Hire Insurance
Credit Hire Insurance (also known as replacement vehicle cover) is an insurance product that covers the cost of a replacement vehicle hired on a credit basis after an accident. The hire costs are then recovered from the third-party insurer, who is believed to be at fault.
How to Make a Credit Hire Claim with Accident Claims Assist
Contact Us: Contact Accident Claims Assist via their website or phone to start your claim.
.Contact Us: Contact Accident Claims Assist via their website or phone to start your claim.
.Provide Accident Details: Share the details of the accident and any supporting evidence.
.Replacement Vehicle: The team will arrange for a comparable replacement vehicle, which will be available as soon as your claim begins.
.Claim Handling: Accident Claims Assist handles the entire process, including communicating with insurers and coordinating repairs.
.Back on the Road: With everything managed for you, your costs will be recovered from the at-fault driver’s insurance, leaving your policy unaffected.
Conclusion
Credit hire helps drivers stay mobile after a non-fault accident without the burden of paying upfront for a replacement vehicle. By understanding how credit hire works, you can avoid potential financial stress and ensure that the liability falls where it belongs—on the at-fault driver’s insurer.
