What is credit hire?
The term Credit hire refers to a facility offered by accident management companies that allows a non-fault driver to obtain a replacement car on a credit term after a road traffic accident, with the accident management company striving to recover the charges from the faulty driver’s insurers.
Evolution of credit hire
Credit hire service began in the 1980s as a way to help non-fault drivers to stay on the road quickly after a road accident. Initially, it provided a solution for temporary transport, but over the years, it has progressed to better protect non-fault drivers’ rights and minimize their financial effects.
Nowadays, credit hire is a recognized part of the insurance and is supported by accident management companies or by Credit Hire Organisations and governed by The General Terms of Agreement.
What is a credit hire company?
A credit hire company is an organization that provides a replacement vehicle to an individual who was not at fault in an accident. The organization offers this service as a substitute for using your insurance.
Credit Hire is when a replacement vehicle is provided by an accident management company in the event of a non-fault accident, and the accident management company funds the vehicle hire while your car is being repaired. The accident management company will then claim the hire cost from the faulty driver’s insurer.
Credit Hire company also provides Credit Repair services, subject to their terms and conditions, where they will arrange and pay for your vehicle to be repaired and recovered from the faulty driver’s insurer.
How does credit hire work?
Once it’s decided that the accident was not your fault, an accident management company provides you with a replacement car. The faulty driver’s insurers then claim the costs of this hire. This whole process might sound straightforward, but the entire process can be complex. It requires coordination between accident management companies, insurance companies, and sometimes even solicitors.
While you use the replacement car, the accident management company marks the costs. Once your vehicle is repaired or once you receive compensation amount for a total loss, the replacement is returned, and the total costs are calculated. These costs are then submitted to the insurers of the party at fault for compensation amount.
Benefits of credit hire companies
Many people automatically think of their insurance company as the first point of contact after a road accident. However, when it comes to a non-fault road accident, this is not the best choice. The Insurance companies are designed to sell insurance and manage claims against their insurance policies, not to handle non-fault accident claims against other insurance providers.
- No upfront charges: You do not need to pay any upfront when you take a credit hire vehicle.
- Liability on the Faulty Driver: The credit hire organization will strive to recover the charges of the hire vehicle from the insurers of the driver liable for the accident.
- Hire agreement: When you obtain a credit hire vehicle, you sign an agreement mentioning the daily hire cost and the terms of the hire agreement.
- Potential for cost disputes: Insurance companies may not agree on the cost of the hire vehicle, leading to legal disputes to recover the full hire amount.
- Untouched no-claims bonus: Your no-claims bonus remains protected as we claim directly against the faulty driver’s insurance provider, not your insurance policy.
- No excess charges: Unlike claiming through your insurance, there is no excess fee, saving you from out-of-pocket expenses.
- Comparable vehicle: You receive a vehicle of the same size and specification as your vehicle for the whole duration your vehicle is off the road.
- Avoiding insurance premiums: We assist you in avoiding the risk of having a claim on your insurance policy or losing your no-claims bonus, both of which lead to higher insurance premiums.
Credit hire claim
A credit hire claim in the UK refers to a claim where, after a non-fault accident, a claimant rents a replacement car from a credit hire organization and then attempts to recover the cost of that hire from the at-fault driver’s insurance, charging the hire cost on a credit basis, with the expectation that the at-fault insurance will pay the charges once liability is admitted; which means you don’t have to pay upfront cost for the replacement car yourself.
Duration of credit hire
The period of credit hire in the UK depends on the accident circumstances, but courts will consider the reasonableness of the duration.
- In England and Wales, the limitation for credit hire claims is six years from the date of the accident.
- If a person has been injured, the time frame for a hire claim is three years from the accident date.
Gathering evidence for your compensation claim
To support your claim, it’s essential to have information like the faulty driver’s details, insurance details, witness statements, photos from the scene of the accident, and a copy of a police report (if required). We assist you in gathering the evidence to ensure a hassle-free claims process.
Credit hire insurance
Credit Hire Insurance, also called replacement vehicle cover, insures vehicles to be hired out on a credit term to the non-fault driver in the event of an accident. The cost of this hire is then recovered from the third-party insurance who is believed to be at fault in the accident.
If you run a Credit Hire Company, you will have a car fleet available for hire to any party involved in a non-fault accident. As part of arranging the credit hire of these cars, each party and car will be insured during the hire period which is where hire insurance comes in.
Credit Hire vehicles can also be used for daily tasks by the hirer party with the appropriate permissions, such as for social & domestic purposes, business use, travelling or PCO use.
How to make a credit hire claim with Accident Claims Assist
Here is a credit hire process through accident claims assist
Contact us:
Please speak to us or visit our website and fill out the form to start your claim.
Provide accident details:
Share the circumstances of the accident and all relevant evidence to support your claim.
Replacement Vehicle:
We will arrange a comparable vehicle, available from the same day of starting your claim with us.
Claim handling:
Our team manages everything, from communicating with insurance to coordinating vehicle repairs and recovery after an accident.
Back on the Road:
Enjoy peace of mind knowing all costs and losses are recovered from the faulty driver’s insurance, and your policy is left unaffected.
Accident Claims Assist offers the support of a credit hire specialist and the service benefits of the accident management company.
Accidents are stressful, both emotionally and humanely. Credit hire reduces some of this stress by making sure that your life does not come to a stop because of a damaged vehicle. By understanding how credit hire company works, you can make decisions and ensure that, even in unlucky circumstances, you remain mobile.
