Accident! Which Courtesy Car should you Accept?

You have had an accident and it is not your fault.  By the time you get home, every car hire company under the sun is offering you a “free” replacement car.  Now, your own insurance company’s preferred car hire company and the other at-fault driver’s insurers have joined the race and they each want you to accept their offer of a hire car .

Those who are not drivers or been involved in a car accident will find this story alien.  Those who have had an accident, will find this article all too familiar.  The important thing for everyone is to know the basics for when the worst happens – the likelihood of any one of us being involved in a car accident, through no fault of our own, is very high.

Which offer should you accept?

Nothing less than a comparable and adequate substitute!

The law allows you to recover the costs of a comparable replacement car – after all, you should not be put out by an accident caused by a stranger.  However, you are expected to take “reasonable” steps to arrange such a car at minimum cost.  So how should you navigate around all these offers whilst dealing with the trauma and possible injury that may have arisen from the accident.

1) You should not be pressured to accept an offer from anyone.  The most likely source of pressure is the at-fault driver’s insurance company; they may say something along the lines of, you will not be entitled to the costs of hire from any third party, if you reject our offer OR we will only pay £20 per day against any hire from any third party and you are unlikely to get any adequate replacement car for that.

2) If you are offered a car from the at-fault driver’s insurance company, consider whether it is a comparable replacement car and adequate for your purposes.  If the answer to both questions is YES, its sensible to take up such an offer.  If you are unsure, seek advice from your own insurance company –  you are entitled to take the time to consider the offer. Copley v Lawn 2009 EWCA Civ 580.

Think carefully before you accept!  The at-fault driver’s insurance company is motivated by the desire to provide a replacement car at minimal cost.  That is all well and good unless they try and dismiss you with an inadequate replacement car.  E.g. did your car have sat-nav, similar engine size, special fittings for disabilities, sufficient boot size, parking sensors… the list goes on.

3) If you are offered a car from your own insurance company’s preferred car hire company, once again, consider whether it is a comparable replacement car and adequate for your purposes.  These guys should be on your side but their independence is unfortunately tainted by the industry agreements most insurance companies have signed up to with each other.  More often than not, these guys should have the flexibility to find an adequate replacement car for you.  BUT not always…

Warning!

Time for a little personal tale: in the same situation, I rejected offers from both the at-fault driver’s insurance company and my own insurance company.  Neither would offer me a car with parking sensors (my car had parking sensors).  I felt I needed this facility because a) I am used to parking with this aid; and 2) I live on a street where I usually have to park a 5m car in exactly 5m of space.  The last thing I wanted was to scratch a hire car and pay out of my nose to repair it. Because the insurance companies and independent car hire companies have an understanding with each other, nobody would hire any car to me as soon as I let them know that I rejected my own insurance company’s offer – I was literally working my way down the Google version of the Yellow Pages.  Eventually someone did, they charged over the odds for the service, and recovered their fees fully.  That only resulted because the whole market closed the door on me because of the mutual understanding in the industry – otherwise, a replacement car would have cost 1/3rd of what it did in the end.

4) If you are offered a credit hire car from an independent car hire company, then as long as you do not mislead / lie to them as to your engagements and mitigations to date, there is little risk on your part.  Most importantly, you will need to disclose to them if you have rejected offers to date and whether you really “need” a car.

They are “credit hire” companies because they charge for the fact that they are taking the risk of delayed or non-payment.  The service is “free” to you as long as you answer their questions in good faith.  They take the risk on the credit costs on the basis that you do not have the resources to pay for a car hire service up front and the probability that they will be able to recover the same from the at-fault driver’s insurance company.  If their gamble does not pay off, they take it on the chin.

Nothing in life comes for free

Lastly, it is important to dispel a myth.  None of the offers are actually completely free.  It is free at the point of use (like the NHS and Universities and many commercial loans) but somebody down the line will pay for it – you, your insurance company (then you indirectly via increased premiums) or the at-fault driver’s insurance company (then the at-fault driver indirectly via increased premiums).  It is not a coincidence that insurance companies don’t actually pay for anything in the long run!

  • If the hire car is from the at-fault driver’s insurance company, that insurance company will pay for it.
  • If the hire car is from an independent car hire company, the at-fault driver’s insurance company will eventually compensate the independent car hire company.
  • If the hire car is from an independent car hire company and you misled / lied about something with them, you may have to pick up the bill.
  • If the hire car is from an independent car hire company and they charged you too much, they will have to take it on the chin themselves.
  • If the hire car is from your own insurance company’s preferred car hire company, they will recover their costs from the at-fault driver’s insurance company.

The above is very good reason to drive carefully, try and compensate for other bad driving, and avoid having to deal with insurance companies and car (credit) hire companies.

If any readers have questions on this article, they will be happily received @ taj.uddin@gcp-barristers.com.

Taj Uddin MA Oxon, Barrister

Guildhall Chambers Portsmouth
Practising in London and the South (Salisbury to Brighton, Oxford to IoW)

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