press release
Insurers – the battle of credit hire
11 June 2007
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.
Andrew Christon, associate 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.
Andrew Christon 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.”
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