Motor Claims - Replacement Vehicles

Claims - “I am not at fault and have been offered a free courtesy car”.

When you’re not at fault for an accident you will probably receive several texts, calls or letters from various companies offering you a replacement vehicle. Whilst yours is being repaired or waiting for settlement if it is beyond economical repair (Total loss) but what are the options?

Courtesy car

This might be offered by your Insurer if your vehicle is repaired, probably by one of their suppliers if one is available. The courtesy car is often provided by the repairer at no or limited cost to the Insurer and availability is not guaranteed. The vehicle will be small such as a Ford Fiesta, so not likely to be the same as your own. You are unlikely to receive a courtesy vehicle if your vehicle cannot be repaired.

You will only pay for fuel and any excess should the courtesy vehicle be damaged or stolen. If you don’t need to travel far or often, then this is a great option and worth considering if offered.

Scenario Will the vehicle be available or be provided? Comments
At fault If available but not certain If provided it will be a small vehicle not a like for like. Will be provided by the repairer often the insurer pays nothing or a limited amount. There is also often limited mileage use applied.
Non fault No You are likely to be offered a credit hire vehicle or an intervention vehicle from the at fault third party Insurer.
Theft - non repair No N/A
Positives Negatives
You only pay for fuel and any excess if the vehicle is damaged or stolen. It is not always going to be available. It will be dependent on the repair network.
No financial or legal risk to you. The vehicle will be small. So not ideal if you use your vehicle every day or travel long distances. If you exceed the limited mileage, additional charges may be applied.
No extra cost, it is included within the terms of your policy.

Will not be provided if the vehicle is not repaired. i.e. a total loss.
 

If you are not at fault, you will be offered a like for like vehicle on a credit hire or intervention basis but you still have the option to use a courtesy car if it's available.

Replacement car via your own policy

When you take out motor insurance you may be offered the opportunity to purchase a hire replacement vehicle as part of the main policy or separately. These policies usually provide you with options to have a replacement vehicle whilst yours is being repaired, or if it can't be repaired whilst you await funds to secure another vehicle. The policy will probably have levels of cover detailing the size of the vehicle and the number of days you have access, which is usually  up to 14 or 21 days.

If you’re at fault you will be provided with a replacement vehicle based on the options selected and policy terms. If you’re not at fault it is likely, despite the policy that you will be offered a credit hire replacement vehicle.  

This isn’t a bad option as it can provide a like for like vehicle even if you are at fault for the accident. If you need a larger vehicle and travel long distances this might be the best option for you but it will cost you more and does have restrictions.

Scenario Will the vehicle be available or be provided? Comments
At fault Yes The vehicle type will be dependent on the level of cover selected but could be an equivalent, like for like.
Non fault Yes You are likely to be offered a credit hire vehicle or an intervention vehicle from the at fault third party insurer.
Theft - Non repair Yes Many policies will provide a vehicle for non repair cases also, So will cover a period if your vehicle is stolen and not recovered.
Positives Negatives
The vehicle will be larger than a courtesy vehicle. Possibly up to a like for like vehicle. You need to pay an additional premium to access this option.
You only pay for fuel and any excess if the vehicle is damaged or stolen. The period of hire is limited to up to 14 or 21 days.
You have access to a vehicle even if you are at fault. If you are non-fault, you will more than likely be offered a credit hire or intervention vehicle solution. If your insurer refers you to credit hire, your Insurer will profit from you.
No financial or legal risk to you on fault cases If you are not at fault and use credit hire there is a small risk.

Replacement vehicle provided by the at fault, and liable Third-party insurer

It can take Third party Insurers time to investigate and decide who is liable for an accident. You may only receive any offer of a vehicle after the time it was needed. However, if you are offered a vehicle and liability is accepted, this is probably the best option for most people as the risks are low and you will receive an equivalent sized vehicle for the duration of repairs, or until you receive funds for a vehicle if it is beyond economical repair (Total loss).

Scenario Will the vehicle be available or be provided? Comments
At fault No You will not be offered a vehicle by the third-party insurers.
Non fault Possibly If the third-party insurers are proactive and can agree to liability, then they will seek to intervene and offer you. a like for like a replacement vehicle.
Theft - Non repair No You will not be offered a vehicle by the third-party insurers.
Positives Negatives
The vehicle will be offered on a like for like basis. An offer may not be made to you or long after you need the vehicle.
You only pay for fuel and any excess if the vehicle is damaged or stolen. You will not be offered a vehicle if you are at fault or if your vehicle is a total loss.
No financial or legal risk  

Replacement vehicle provided to you when you’re not at fault

In many cases if you’re not at fault for an accident, your Insurer, broker, solicitor or repairer may refer your details to a credit hire firm. They do this because they receive a commission often running into several hundreds of pounds.

Usually, you will be asked to sign a credit hire agreement, which includes credit terms, a mitigation statement and right to cancel within 14 days. 

You are under a legal duty to tell the truth about the need for the vehicle and to  control the costs incurred. The credit agreement will state  you are liable to pay back by no more than 12 instalments within 12 months to the credit hire firm, if they fail to recover because you did not support the credit hire company in seeking recovery or you are untruthful in the information and responses to their questions.

You will also be asked to provide evidence such as your driving licence, insurance certificate, V5 and if you couldn't afford to pay for a hire vehicle yourself you may also be required to provide a statement of truth and supply copies of bank statements, credit, and loan accounts.

In some cases, the credit hire company cannot agree a settlement with the third-party insurer and will need to issue proceedings. They will need you to support this legal action as it is undertaken in your name. There is a risk in credit hire, you are signing a legally enforceable contract and need to be truthful and supportive to help the credit hire organisation obtain a recovery. In most cases you will not be required to pay anything but it is a legal contract, so you need to read the contract carefully before signing.

Overall if you need a replacement vehicle, are not at fault and prepared to sign and accept the terms and conditions of the agreement and support the recovery then this is a good option.

Scenario Will the vehicle be available or be provided? Comments
At fault No You will not be offered a vehicle by the credit hire firm.
Non fault Possibly It is likely your insurer or broker will refer your details to a credit hire firm. If they agree liability is clear and after you have provided details and signed a contract, they will provide a vehicle to you.
Theft - Non repair No You will not be offered a vehicle by the credit hire firm.
Positives Negatives
The vehicle will be offered on a like for like basis. You will only be offered a vehicle if you sign a credit hire agreement and meet the criteria of the credit hire company and liability is clearly in your favour, at least 50% or more.
  You will not be offered a vehicle if you are at fault or if your vehicle is a total loss.
  You are signing a credit hire agreement, a mitigation statement of truth, so there is a risk.
  You will need to provide evidence and support the recovery process.
 

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