3rd party refusing hire costs?
Discussion
PurpleMoonlight said:
I would think the credit hire insurance will only pay out when the OP has taken all reasonable steps to recover his loss, ie County Court action against the third party.
The accident management company and/or the credit hire company may well assist him in that though.
Before the credit hire insurance would pay out why would the OP have to take steps to recover his losses as the agreement he signed says that he would not be liable as it covers him against any charges they can't recover.They may inform him of the amount that the third party have not settles but forward the invoice to the insurance company for payment which no doubt the AM company owns along with the company that arranges the hire car.The accident management company and/or the credit hire company may well assist him in that though.
Thats how insurance works - when I have an accident in my car I dont have to recover my losses by taking the other driver to court before my insurance company get involved.
This isn't a real insurance policy per se is it though. In reality, if the AM company don't make a recovery from the TP insurer, all they're going to do is write off that figure.
The terms and conditions of either the hire agreement or insurance policy will dictate that the hirer has to help the hire company make a recovery by assisting them every step of the way and having proceedings issued in his name for recovery of the same. Ultimately, it would lead to him having to attend Court to provide witness evidence as to why he needed to accrue such hire charges.
The terms and conditions of either the hire agreement or insurance policy will dictate that the hirer has to help the hire company make a recovery by assisting them every step of the way and having proceedings issued in his name for recovery of the same. Ultimately, it would lead to him having to attend Court to provide witness evidence as to why he needed to accrue such hire charges.
btcc123 said:
The fact that the company has earnt their referral fee has nothing to do with anything regarding the OP.He will not be liable for any costs as he has said:
The documents I signed say that I have an insurance policy included that covers me against any charges they can't recover.
So 3 things may happen:
1.The third party will acccept the claim in full so no costs to the OP.
2.If the third party insurance company reject some of the claim the OP will be protected by his insurance policy against any charges the management company fail to recover.
3.The management company may decide to sue in court the third party insurance company to recover their losses.The OP may have to attend court just to explain what happened regarding the details of the accident.That is all and will then be free to leave.He will not be liable for any costs whether they are court or insurance costs.
There is a lot of information regarding this on the internet and I would encourage the OP to read about it,to speak to the management company and the third party insurers.
With my polite hat on, your invoking the internet let alone the content of what you say clearly shows you have no idea what you’re talking about.The documents I signed say that I have an insurance policy included that covers me against any charges they can't recover.
So 3 things may happen:
1.The third party will acccept the claim in full so no costs to the OP.
2.If the third party insurance company reject some of the claim the OP will be protected by his insurance policy against any charges the management company fail to recover.
3.The management company may decide to sue in court the third party insurance company to recover their losses.The OP may have to attend court just to explain what happened regarding the details of the accident.That is all and will then be free to leave.He will not be liable for any costs whether they are court or insurance costs.
There is a lot of information regarding this on the internet and I would encourage the OP to read about it,to speak to the management company and the third party insurers.
The thread continues with discussion of it not being a real policy that will actually be claimed on which while true would be a distraction for you and others to understand what is happening here.
The OP and only the OP is the Claimant at Court here. It’s his ‘loss’.
His evidence won’t just be limited to the details of the accident. Indeed it may not involve any of that really if liability (for the accident itself, not any and all losses) is accepted.
The crux is that the claim is based on him being liable for the hire costs. How successful do you think the claim would be if he revealed the insurance policy covering his own liability on that if he ‘co-operates’ with the hire company?
The other side know he will have such cover or similar but for the reasons LoonR1 has discussed in the other linked thread and others, the insurers won’t rock the boat even though the referral fee income is tiny compared to the hire costs they pay out.
However this all involves the OP in providing incomplete and misleading information to the Court. (read that line again!)
Given the insurers won’t rock the boat it’s unlikely to be a problem and this scam and fraud goes on every day BUT that is not something I would ever want to involve myself in.
The leverage the hire company have of course is the threat of the hirer having to pay because they haven’t played ball.
I’d love to see a case between the hire company and the hirer on that basis, but probably won’t because the hire company would be choosing to openly reveal their scandalous business model.
However let’s not get sidetracked with more than the basics at the moment.
OP you must not (as suggested above) contact the third party insurers at all about this.
What insurance you have likely does cover you but that’s the whole problem.
Your claim will be based on saying you are personally liable for the hire charges but not revealing you are covered for this.
While it happens all the time, I personally have an intense hatred for anyone lying to the Court.
Even if you were scammed into signing something you didn't read (???
) you haven't been scammed by THIS insurer, amc or hirer as they all do it, and you've got into bed with them.Edited by pork911 on Sunday 22 March 12:32
But the re-insurance for the credit hire *only* covers him against his personal liability.
There is no need for him to mislead the court.
Your argument appears to say that:
1. He is not liable because he has insurance in place to cover any liability;
2. If he admits to the existence of that insurance he will not be able to recover from the third party, because he would have no liability;
3. If he admits that to the court, he will be liable to the credit hire company on the basis of his failure to cooperate.
I would dispute 1. (as the insurance company's liability only ever takes effect after - even if immediately after - the insured's personal liability to the CH company). Nonetheless, I accept that the Court would be able to reject the claim on the basis that, e.g., there was no impecuniosity or simply that the insurance policy is an artificial construct. However that rejection wouldn't stop the insurance policy from paying out - i.e., it's not the insured claimant's problem.
If however there is a finding of personal liability, and the insurance somehow refused to "pay out" (i.e., they declined to write off) they would then find themselves in the untenable position of attempting to recover from an insured on the basis that the insured had *failed* to mislead the court. That term would be void for illegality and any attempt to enforce it would completely turn the courts against the credit hire companies.
I'm no fan of the business model, but the idea that it is somehow necessary to cover up the existence of a policy for the model to work is a logical leap too far for me.
There is no need for him to mislead the court.
Your argument appears to say that:
1. He is not liable because he has insurance in place to cover any liability;
2. If he admits to the existence of that insurance he will not be able to recover from the third party, because he would have no liability;
3. If he admits that to the court, he will be liable to the credit hire company on the basis of his failure to cooperate.
I would dispute 1. (as the insurance company's liability only ever takes effect after - even if immediately after - the insured's personal liability to the CH company). Nonetheless, I accept that the Court would be able to reject the claim on the basis that, e.g., there was no impecuniosity or simply that the insurance policy is an artificial construct. However that rejection wouldn't stop the insurance policy from paying out - i.e., it's not the insured claimant's problem.
If however there is a finding of personal liability, and the insurance somehow refused to "pay out" (i.e., they declined to write off) they would then find themselves in the untenable position of attempting to recover from an insured on the basis that the insured had *failed* to mislead the court. That term would be void for illegality and any attempt to enforce it would completely turn the courts against the credit hire companies.
I'm no fan of the business model, but the idea that it is somehow necessary to cover up the existence of a policy for the model to work is a logical leap too far for me.
CYMR0 said:
But the re-insurance for the credit hire *only* covers him against his personal liability.
There is no need for him to mislead the court.
Your argument appears to say that:
1. He is not liable because he has insurance in place to cover any liability;
2. If he admits to the existence of that insurance he will not be able to recover from the third party, because he would have no liability;
3. If he admits that to the court, he will be liable to the credit hire company on the basis of his failure to cooperate.
I would dispute 1. (as the insurance company's liability only ever takes effect after - even if immediately after - the insured's personal liability to the CH company). Nonetheless, I accept that the Court would be able to reject the claim on the basis that, e.g., there was no impecuniosity or simply that the insurance policy is an artificial construct. However that rejection wouldn't stop the insurance policy from paying out - i.e., it's not the insured claimant's problem.
If however there is a finding of personal liability, and the insurance somehow refused to "pay out" (i.e., they declined to write off) they would then find themselves in the untenable position of attempting to recover from an insured on the basis that the insured had *failed* to mislead the court. That term would be void for illegality and any attempt to enforce it would completely turn the courts against the credit hire companies.
I'm no fan of the business model, but the idea that it is somehow necessary to cover up the existence of a policy for the model to work is a logical leap too far for me.
You assume a lot about what I believe but certainly touch on some issues we will never see argued in Court.There is no need for him to mislead the court.
Your argument appears to say that:
1. He is not liable because he has insurance in place to cover any liability;
2. If he admits to the existence of that insurance he will not be able to recover from the third party, because he would have no liability;
3. If he admits that to the court, he will be liable to the credit hire company on the basis of his failure to cooperate.
I would dispute 1. (as the insurance company's liability only ever takes effect after - even if immediately after - the insured's personal liability to the CH company). Nonetheless, I accept that the Court would be able to reject the claim on the basis that, e.g., there was no impecuniosity or simply that the insurance policy is an artificial construct. However that rejection wouldn't stop the insurance policy from paying out - i.e., it's not the insured claimant's problem.
If however there is a finding of personal liability, and the insurance somehow refused to "pay out" (i.e., they declined to write off) they would then find themselves in the untenable position of attempting to recover from an insured on the basis that the insured had *failed* to mislead the court. That term would be void for illegality and any attempt to enforce it would completely turn the courts against the credit hire companies.
I'm no fan of the business model, but the idea that it is somehow necessary to cover up the existence of a policy for the model to work is a logical leap too far for me.
The insurance (or side letter, or nod and a wink) are just comfort for the person hiring – otherwise no one in their right mind would credit hire believing they were on the hook for the charges.
Now, the key in pursuing the hire charges is that the person who hired is liable – all other issues of need, reasonableness, impecuniosity etc are irrelevant if that liability isn’t established.
Establishing that involves what was said, done and written.
Depending on how the shortfall / non-recovery insurance is worded it may not necessarily kill that liability – but it is incredibly complex and we will never know as no one will reveal it when claiming credit hire.
Think it through – i want you to pay my liability under a contract which i entered into ON THE BASIS OF a side policy that covers me from any liability.
pork911 said:
Think it through – i want you to pay my liability under a contract which i entered into ON THE BASIS OF a side policy that covers me from any liability.
No, I would assume the insurance will only pay up when you have exhausted all avenues available to recover your losses from the third party. The County court claim is the final avenue and I fail to see any reason why the existence of the policy should need to be kept secret from the court.The County court will only concern themselves with the establishment of any liability and the quantity of that liability against the third party. It won't be bothered about how the claimants remaining loss, if any, is recovered.
This is from Accident Exchange website.
Insurance Protection
For your added protection and peace of mind, we are able to arrange an insurance policy on your behalf which (subject to the terms and conditions of the policy) protects you from having to pay our charges in the event that they are not recovered from the at fault driver or their insurer. Subject to certain qualifying criteria, we provide this cover free of charge when you hire a vehicle from us - we pay the insurance premium on your behalf. We will provide you with further details of this insurance policy before we deliver a car to you.
Although I do not know the terms and conditions of the policy or the qualifying criteria and also all the legal aspects in cases like this where at the end of the day the policy holder is liable for some charges.But certainly gives the inpression you would not be liable.
What would happen if the OP received a letter from the AM company saying that he has a liability of £1000 could he not take the AM company to the small claims court where I believe that the absolute law ias not inforced but the judge uses more of a common sense approach.
The judge could read all the AM companies operating practices,their terms and conditions and perhaps conclude thats its a bit of a scam and are not up front that the policyholder could be liable if the third party insurance reject the claim.The judge speaking to the OP and reading many other cases on the forums and internet deam that people are unaware what they could possibly letting themselves in for.
What do you think the outcome of the small claims court case would be.
Insurance Protection
For your added protection and peace of mind, we are able to arrange an insurance policy on your behalf which (subject to the terms and conditions of the policy) protects you from having to pay our charges in the event that they are not recovered from the at fault driver or their insurer. Subject to certain qualifying criteria, we provide this cover free of charge when you hire a vehicle from us - we pay the insurance premium on your behalf. We will provide you with further details of this insurance policy before we deliver a car to you.
Although I do not know the terms and conditions of the policy or the qualifying criteria and also all the legal aspects in cases like this where at the end of the day the policy holder is liable for some charges.But certainly gives the inpression you would not be liable.
What would happen if the OP received a letter from the AM company saying that he has a liability of £1000 could he not take the AM company to the small claims court where I believe that the absolute law ias not inforced but the judge uses more of a common sense approach.
The judge could read all the AM companies operating practices,their terms and conditions and perhaps conclude thats its a bit of a scam and are not up front that the policyholder could be liable if the third party insurance reject the claim.The judge speaking to the OP and reading many other cases on the forums and internet deam that people are unaware what they could possibly letting themselves in for.
What do you think the outcome of the small claims court case would be.
btcc123 said:
What do you think the outcome of the small claims court case would be.
I feel a Judge would likely award compensation for an appropriate hire charge, which will likely be less than what the OP is being charged.The 'insurance policy' will then pick up any shortfall assuming their t & c's have been complied with.
justanother5tar said:
I'm more confused than ever now, having read the last couple of posts.
What exactly is this having to mislead and leave out facts to the court? I don't like the sound of that one bit!
Everyone on here is speculating what may happen but dont know what will happen.What exactly is this having to mislead and leave out facts to the court? I don't like the sound of that one bit!
You have said that you received a letter from the AM company saying that the third party are not fully settleng but have so far not told you if you are liable for anything.
I would ring or E-mail them tomorrow and find out if you are in their view are liable.They may say no but if they say yes ask them how much and why their free insurance policy is not covering the liability and then post the details on here.
PurpleMoonlight said:
pork911 said:
Think it through – i want you to pay my liability under a contract which i entered into ON THE BASIS OF a side policy that covers me from any liability.
No, I would assume the insurance will only pay up when you have exhausted all avenues available to recover your losses from the third party. The County court claim is the final avenue and I fail to see any reason why the existence of the policy should need to be kept secret from the court.The County court will only concern themselves with the establishment of any liability and the quantity of that liability against the third party. It won't be bothered about how the claimants remaining loss, if any, is recovered.
how many people would credit hire without it?
justanother5tar said:
I'm more confused than ever now, having read the last couple of posts.
What exactly is this having to mislead and leave out facts to the court? I don't like the sound of that one bit!
ask them does this policy cover me as long as i do all i can to recover the hire charges What exactly is this having to mislead and leave out facts to the court? I don't like the sound of that one bit!
AND
will i be disclosing that policy to the third party insurers and explaining that i wouldn't have entered into the hire without it?
the answer to the first will likely be yes, the answer to the second, hmmmmm, let us all know exactly what (if anything) they say
btcc123 said:
Everyone on here is speculating what may happen but dont know what will happen.
of course, given litigation risk and the judge 'applying common sense rather than absolute law' however some of us are speculating a little more than othersthat you still choose to focus on whether the policy covers rather than the consequences of that shows you haven't got a clue
pork911 said:
that you still choose to focus on whether the policy covers rather than the consequences of that shows you haven't got a clue
What do you think would happen if the comfort policy refused to pay out on the basis that the claimant (their insured) had *not* misled the court?Isn't this a risk that the credit hire provider has no choice but to run? We may disagree on the severity of the risk, but is there any way that they can ever bounce that risk back to their insured, having offered the policy in the first place?
I had similar with my broker (rhymes with be beanfight) and accident exchange. Someone hit me, I reported it etc and they passed it straight over to Accident Exchange. I had like for like on my policy so they gave me a 320i coupe for my MX5. Costs for that were £300+ per day......I had it for 3 days whilst they decided my car was a write off.
Got a letter a few weeks later having been paid out saying that they hadn't recovered all costs from the other insurer but would keep trying.
Fast forward a few weeks and they sent another letter saying it was resolved.
The whole industry is a disgrace and if like me you've not had an accident before then its impossible to know what you should and shouldn't do.
Got a letter a few weeks later having been paid out saying that they hadn't recovered all costs from the other insurer but would keep trying.
Fast forward a few weeks and they sent another letter saying it was resolved.
The whole industry is a disgrace and if like me you've not had an accident before then its impossible to know what you should and shouldn't do.
CYMR0 said:
pork911 said:
that you still choose to focus on whether the policy covers rather than the consequences of that shows you haven't got a clue
What do you think would happen if the comfort policy refused to pay out on the basis that the claimant (their insured) had *not* misled the court?Isn't this a risk that the credit hire provider has no choice but to run? We may disagree on the severity of the risk, but is there any way that they can ever bounce that risk back to their insured, having offered the policy in the first place?
Do we really believe the policy ever pays out? The hire company just write the charges off. The policy serves two purposes - providing comfort so that someone credit hires in the first place (so is fundamental to the formation of the credit hire contract) and later leverage to persuade them to co-operate with efforts to recover the hire charges (with the threat that they will have to pay it themselves if they do not co-operate).
If it became clear the hirer is fully on board to co-operate with the recovery of the hire charges BUT was not willing to exclude the policy from their evidence, do you really think the hire company are going to do anything else other than just accept whatever offer for the hire was on the table, write off the loss and not even attempt to puruse the hirer for the shortfall?
I can't see any way in which the policy could validly specify that it only provides cover where the hirer keeps its existence secret, any claim against the hirer for failing to do so (but co-operating in every other way) would be bound to fail and I'm pretty sure no hire company would want to base a claim on this.
Edited by pork911 on Monday 23 March 03:57
pork911 said:
(for the OP's purposes, don't read this post with the question 'am I covered?' in mind as it will just confuse you further)
Do we really believe the policy ever pays out? The hire company just write the charges off. The policy serves two purposes - providing comfort so that someone credit hires in the first place (so is fundamental to the formation of the credit hire contract) and later leverage to persuade them to co-operate with efforts to recover the hire charges (with the threat that they will have to pay it themselves if they do not co-operate).
If it became clear the hirer is fully on board to co-operate with the recovery of the hire charges BUT was not willing to exclude the policy from their evidence, do you really think the hire company are going to do anything else other than just accept whatever offer for the hire was on the table, write off the loss and not even attempt to puruse the hirer for the shortfall?
I can't see any way in which the policy could validly specify that it only provides cover where the hirer keeps its existence secret, any claim against the hirer for failing to do so (but co-operating in every other way) would be bound to fail and I'm pretty sure no hire company would want to base a claim on this.
I wonder if there might be tax advantages in shifting profits to e.g., Gibraltar, by purchasing policies within a group and then paying out shortfalls. But in general, I agree that these policies are not open market commercial policies that have an incentive to run in the same way as any normal policy.Do we really believe the policy ever pays out? The hire company just write the charges off. The policy serves two purposes - providing comfort so that someone credit hires in the first place (so is fundamental to the formation of the credit hire contract) and later leverage to persuade them to co-operate with efforts to recover the hire charges (with the threat that they will have to pay it themselves if they do not co-operate).
If it became clear the hirer is fully on board to co-operate with the recovery of the hire charges BUT was not willing to exclude the policy from their evidence, do you really think the hire company are going to do anything else other than just accept whatever offer for the hire was on the table, write off the loss and not even attempt to puruse the hirer for the shortfall?
I can't see any way in which the policy could validly specify that it only provides cover where the hirer keeps its existence secret, any claim against the hirer for failing to do so (but co-operating in every other way) would be bound to fail and I'm pretty sure no hire company would want to base a claim on this.
I'm not sure that they would never litigate in the event that a policyholder wasn't willing to remain silent to the court; claimants say the darndest things and this must have come out in evidence at some point anyway, so I can't see that asking the client to remain silent on it is enough to establish a litigation strategy. Clearly you don't over-emphasise it, but the existence of the policy means that the insurer for these purposes only assumes a secondary liability anyway. Given the frequently low value of these claims (in relation to potential costs) and the risk of undermining the entire business model through unsuccessful litigation, there has to be a powerful incentive to settle in all cases; I'm just not sure that visibility of the insurance policy is sufficient to change that. If it were the case then defendant insurers could use that to undermine the credibility of the client's entire evidence, by asking the question directly and either ending the credit hire claims altogether, or at least catching the claimant in a lie. While I accept that insurers as a whole have an incentive to accommodate the credit hire model, however reluctantly, not all of them are on board with this approach by any means.
I agree with every word of your final paragraph.
CYMR0 said:
If it were the case then defendant insurers could use that to undermine the credibility of the client's entire evidence, by asking the question directly and either ending the credit hire claims altogether, or at least catching the claimant in a lie. While I accept that insurers as a whole have an incentive to accommodate the credit hire model, however reluctantly, not all of them are on board with this approach by any means.
you'll see in the earlier linked thread and elsewhere discussions between me and LoonR1 regarding this - despite his explanations i still can't see any real reason why insurers haven't gone all out to decimate the current credit hire model rather than just arguing over minor issues on the fringes Gassing Station | Speed, Plod & the Law | Top of Page | What's New | My Stuff