If you’re a driver who is not at fault after losing your vehicle in an accident, you’ll likely need a replacement as soon as possible while yours is either being repaired or replaced. 

But instead of paying for this temporary vehicle upfront, you’ll be required to sign a legally-binding credit agreement, which stipulates that the at-fault driver’s insurance provider will pay for it.

The Process

After an accident that wasn’t your fault, you can expect to be contacted by either your insurance provider, a solicitor who specialises in credit hire claims, an Accident Management Company (AMC), or a Credit Hire Organisation (CHO). They will ask you some questions to determine your eligibility. 

If you are eligible, an AMC or CHO will provide you with a replacement vehicle that should ideally be deemed to be ‘like-for-like’ – meaning that it has the same specs as your vehicle. All of the hire costs will be covered by the at-fault driver’s insurer when your repaired or replaced car is back on the road.

Are You Eligible?

In order to receive a credit hire vehicle, you’ll need to fit the criteria.

• You weren’t at fault: You cannot be responsible for the accident that damaged your vehicle.

• You urgently need a replacement: You need to prove that you really need a replacement vehicle in the meantime, whether it’s for your work commute or family commitments.

• You cannot afford to hire: You must not be able to pay to hire a replacement car. If you can, a court may still allow you to recover costs at a standard market rate (rather than at credit hire rates that tend to be higher).

Mitigating Loss

Because you’re a claimant, you have a legal responsibility to keep the costs you incur to a minimum. You must apply this to:

• Your replacement vehicle: It must be a like-for-like replacement, so don’t try to blag yourself a Ferrari or Rolls-Royce.

• The time frame of your hire: Do not keep the hire car for longer than necessary. Keep on top of your car’s repair/replacement status to avoid further delays.

• Choosing a cheaper alternative: The at-fault driver’s insurance provider can occasionally offer a free intervention car; if you refuse it without a strong enough reason, then you might not recover your credit hire costs.

Risks

Ideally, the at-fault driver’s insurance provider will foot the bill, but at the end of the day, you are the one who signed the credit hire agreement. This means that there are still certain risks that you’re taking, and if some decisions don’t go your way, or if parts of the process don’t go to plan, you could end up paying the price.

Here are some examples:

• You’re at fault: After an appeal and further investigations, you are found to be at fault for the accident.

• Fraud: Dishonesty during the process or manipulation of evidence during the accident.

• Poor cooperation: Failing to cooperate with insurance providers or legal representation.

Closing Thoughts

If you’ve recently been involved in a car accident, then I hope that this article has helped to inform you about the process of a credit hire claim and what you might expect moving forward.