Ask Elite - February 2010
I have been approached by a company offering to provide hire vehicles to my drivers when they have been involved in a non-fault accident. What should I know about such an arrangement?
In the case of a non fault accident the driver is entitled to a replacement vehicle. However this entitlement carries with it the obligation to mitigate the loss and therefore it is important to demonstrate that all reasonable steps are taken to do so.
Credit hire was initially introduced to provide for people who were unable to fund the cost of hiring a vehicle whilst theirs was off the road as a result of an accident that was not their fault. Insurers against whom credit hire claims are made now look much closer at whether the claim is truly justified and if the claimant has made all reasonable efforts to mitigate their loss or if there are any elements of the claim that serve to unreasonably increase the cost.
There is a price to pay for obtaining credit and this is reflected in the cost of hiring under a credit agreement as opposed to high street rates. It could be argued that if a company has the funds to hire from one of the major hire companies it would not be attempting to mitigate its losses if it entered into an unnecessary credit arrangement. Similarly if the fleet had other vehicles available that could be used as temporary replacements it would not be held that a hire was necessary at all. Therefore consider such offers with caution.
For guidance on this and other matters of concern to fleet operators please contact us. We will be happy to reply, whether or not you are an existing customer.
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