- within Environment topic(s)
Insurers are being asked to pay significantly increasing sums on a per claim basis by credit hire agencies, according to leading insurance law firm Browne Jacobson. Insurance experts at the firm predict that there is set to be a further battle in the long running war on credit hire.
The firm has seen the number of cases it is defending on behalf of insurance companies rise by 50 per cent in the last year alone.
Many of the claims arise out of the adoption by credit hire agencies of what are perceived to be "improper" practices, such as actively encouraging drivers to select prestige replacement vehicles in the event of an accident. As a result insurers are being hit with vehicle replacement bills that are up to four times higher than the industry average.
Steve Smith, solicitor at the Nottingham office of Browne Jacobson said:
"There is a common belief that insurers must pay for a replacement hire vehicle in all cases. This is simply not the case, and drivers who are involved in an accident will only qualify for a replacement vehicle if it is necessary whilst their own car is out of action. If they have access to a second vehicle there’s no legal requirement to offer a hire car and even then, the replacement vehicle only has to be like-for-like. Credit hire agencies often appear to overlook these facts; substantial profits can be made from providing prestige vehicles to those who would normally drive a more standard model, or who could have done without a vehicle at all.”
There is no immediate prospect of credit hire charges being capped, as this has not been included in the Department of Constitutional Affairs’ most recent proposals for reform of the personal injury claims process. In the light of this fact, Browne Jacobson is urging the insurance industry to take a unified stance in order to ensure that appropriate credit hire vehicles are only supplied when strictly necessary, and only then on a true like-for-like footing.
The firm is currently providing a number of insurers with specialist credit hire strategic advice, training and awareness sessions, which cover all the latest tactics and tips to keep credit hire bills to a minimum.
Steve Smith concluded: “As costs pressures on the insurance industry rise, we are seeing more insurers adopting a much more strategic, coordinated and hands-on approach to this issue, resulting in considerable savings.”
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
