Insurance Co Scam? What am I Missing?
Discussion
I'm confused so hope there're knowledgeable folk here to shed some light.
Mrs G's car was smashed into from the rear at a red traffic light. Nobody hurt so all good. Other driver accepts responsibility.
Her car gets taken away the following day for inspection for repair/write-off, and a hire car was provided (firm is owned by the insurance co). All good so far.
As part of the paperwork we're advised that the hire car cost is £300 a day, and storage for the damaged car is £60 a day. The same car costs £500 a month to lease, so the hire firm is making a fortune. None of my business.
Two months later we're told that the assessor has inspected and written the car off. Fine.
We get a payment of £18k and the hire firm gets around £21k, so they've paid out almost £40k. Not my business.
So I'm wondering why they take so long to inspect the car (if I was the Insurer i'd be the next day to minimise my costs), why the car hire has been agreed at an extortionate rate, and is there some sort of cartel between them?
Seems like a massive rip-off to me. What's really annoying is that all these costs get passed back to us mugs who have to pay the premiums.
What say you?
Mrs G's car was smashed into from the rear at a red traffic light. Nobody hurt so all good. Other driver accepts responsibility.
Her car gets taken away the following day for inspection for repair/write-off, and a hire car was provided (firm is owned by the insurance co). All good so far.
As part of the paperwork we're advised that the hire car cost is £300 a day, and storage for the damaged car is £60 a day. The same car costs £500 a month to lease, so the hire firm is making a fortune. None of my business.
Two months later we're told that the assessor has inspected and written the car off. Fine.
We get a payment of £18k and the hire firm gets around £21k, so they've paid out almost £40k. Not my business.
So I'm wondering why they take so long to inspect the car (if I was the Insurer i'd be the next day to minimise my costs), why the car hire has been agreed at an extortionate rate, and is there some sort of cartel between them?
Seems like a massive rip-off to me. What's really annoying is that all these costs get passed back to us mugs who have to pay the premiums.
What say you?
Edited by Al Gorithum on Saturday 28th October 09:51
The third party insurer will probably refuse to pay the hire bill. It's possible (but unlikely) that your wife might get some hassle about this down the line. They have agreed rates anyway for whatever period they will pay.
When my daughter's car was run into by a van, she claimed on her own insurance, they provided a car, took hers away then wrote it off (which was surprise as I spoke to the repairer and they said they'd be fixing it) sent a cheque and took the car back, all in about 10 days.
They wanted the car back sooner but did agree to leave until the end of the week as she lives in an area with no public transport.
When my daughter's car was run into by a van, she claimed on her own insurance, they provided a car, took hers away then wrote it off (which was surprise as I spoke to the repairer and they said they'd be fixing it) sent a cheque and took the car back, all in about 10 days.
They wanted the car back sooner but did agree to leave until the end of the week as she lives in an area with no public transport.
Did you need the credit hire car they supplied, or did you have another car to use (or the cash to hire one from Enterprise)?
I didn't have a spare car or the cash/credit to hire one myself (required bank statements as proof as I'd been out of work for a year, and waiting for thousands of pounds of fees/expenses to be repaid), so the court approved my credit hire costs when the 3rd party disputed them.
The rates are agreed centrally, so each of the credit hire places (whether in-house, or out-housed to move the blame) should charge the same...to stop the claims of the charges being too high. But that's only for the daily rate...they will still complain/dispute the requirement for one at all...and the duration of the hire...so watch out for any attempts to claw anything back.
I didn't have a spare car or the cash/credit to hire one myself (required bank statements as proof as I'd been out of work for a year, and waiting for thousands of pounds of fees/expenses to be repaid), so the court approved my credit hire costs when the 3rd party disputed them.
The rates are agreed centrally, so each of the credit hire places (whether in-house, or out-housed to move the blame) should charge the same...to stop the claims of the charges being too high. But that's only for the daily rate...they will still complain/dispute the requirement for one at all...and the duration of the hire...so watch out for any attempts to claw anything back.
Al Gorithum said:
So I'm wondering why they take so long to inspect the car (if I was the Insurer i'd be the next day to minimise my costs)
The cost of the delay (notably the hire car) gets passed on to the third party insurer, while the inspection will have been arranged by your own insurer, or by their credit hire/accident management subsidiary. So getting it done next day doesn't minimuse their costs - it minimises their profits.They will have to account for why the inspection took so long and the third party insurer can challenge an unreasonable delay... but it's fair to say that they don't exactly have an incenive to break their backs to get it done as quickly as humanly possible.
(Of course even disregarding that, getting it done next day isn't necessairly cheaper if all the local assessors are busy and you would have to call one in from the other side of the country - so some amount of delay is likely to be perfectly justifiable).
Al Gorithum said:
why the car hire has been agreed at an extortionate rate
The cheapest way would have been for your wife to go down to her local branch of Enterprise, hire a car herself, then ask the third party insurer to reimburse her at a later date. However the average person won't be able afford to pay for a hire car up front for an unknown period of time, with the hope but not the certainty that they'll be reimbursed at some unknown future date, so they need to use a credit hire arrangement instead. Credit hire companies can justify higher rates because (a) they're providing an element of credit as wekk as just the car and (b) they're shouldering the risk thatthe third party insurer will end up not paying, for whatever reason. Can it justify such high rates? Well the courts have generally judge such rates as reasonable - if they didn't the third party insurer wouldn't pay them.
[quote]and is there some sort of cartel between them?
Aretnap said:
They will have to account for why the inspection took so long and the third party insurer can challenge an unreasonable delay... but it's fair to say that they don't exactly have an incenive to break their backs to get it done as quickly as humanly possible.
Under what circumstances do assessors physically go and see and the car? On a bump we were involved in years ago I was told it was done electronically. On another some years before that, a Honda we had repaired by our local Honda dealer, they agrred to cost with the third party insurer over the phone.
Daughter's crash a few years ago was assessed by her insurers approved bodyshop, and her insurer wrote it off (bodyshop said it was repairable).
Has the industry gone backwards?
In 2007 I was in a chip shop at 21:00hrs when I heard an almighty noise of a car skidding at speed and heading towards the row of shops I was in. My 3 yr old Vauxhall Signum was outside and the skidding car hit it and been deflected ending up embedded in the independent butchers shop next door. I have no doubt this deflection saved my life and that of the young girl working in the shop.
The driver ran away and was later arrested, he was delivering Pizza and using his bosses Mercedes whilst racing another delivery driver. I was provided with a car from Enterprise for about 6 weeks by Direct Line as the other party admitted liability. The butchers didn’t re open. My car was fixed and I thought no more about it.
About 6 months later I was informed by Enterprise I owed them £3600 for the hire car. I called them up and was told that the other parties insurers were now refusing to pay out as the car wasn’t insured for business use. This I believe was due to the total losses exceeding £250k.
I called Direct Line who confirmed I was now on the hook for £3600. I advised the call handler that this wasn’t correct which he again reiterated that it was. I then clearly and concisely explained the reason I insured with DL was that they covered you in the event of being involved in an accident with an uninsured driver. The call handler went quiet so I suggested he might need to speak to someone for clarity. Five minutes later he came back on the phone and confirmed they would be paying Enterprise.
That’s why I use DL. The roads are full of uninsured or incorrectly insured drivers.
The driver ran away and was later arrested, he was delivering Pizza and using his bosses Mercedes whilst racing another delivery driver. I was provided with a car from Enterprise for about 6 weeks by Direct Line as the other party admitted liability. The butchers didn’t re open. My car was fixed and I thought no more about it.
About 6 months later I was informed by Enterprise I owed them £3600 for the hire car. I called them up and was told that the other parties insurers were now refusing to pay out as the car wasn’t insured for business use. This I believe was due to the total losses exceeding £250k.
I called Direct Line who confirmed I was now on the hook for £3600. I advised the call handler that this wasn’t correct which he again reiterated that it was. I then clearly and concisely explained the reason I insured with DL was that they covered you in the event of being involved in an accident with an uninsured driver. The call handler went quiet so I suggested he might need to speak to someone for clarity. Five minutes later he came back on the phone and confirmed they would be paying Enterprise.
That’s why I use DL. The roads are full of uninsured or incorrectly insured drivers.
Edited by Mikebentley on Sunday 29th October 10:00
For another point of view, I was hit by a third party shooting out of his drive without looking. While waiting for my undriveable car to be recovered, and within an hour of the crash his insurers (Ageas) phoned me, admitted liability and told me to get a car from Enterprise the following morning. They only had a car from the next size up available and this was agreed with no problem (no Credit Hire nonsense or Accident Management Company involved, of course)
They were mitigating their loss, keeping costs down for everyone and giving me a good service.
They were mitigating their loss, keeping costs down for everyone and giving me a good service.
CanAm said:
For another point of view, I was hit by a third party shooting out of his drive without looking. While waiting for my undriveable car to be recovered, and within an hour of the crash his insurers (Ageas) phoned me, admitted liability and told me to get a car from Enterprise the following morning. They only had a car from the next size up available and this was agreed with no problem (no Credit Hire nonsense or Accident Management Company involved, of course)
They were mitigating their loss, keeping costs down for everyone and giving me a good service.
That's the irony - you are better off going through the third party insurer as they've got a strong incentive to get things sorted quickly, whereas your insurer (or whatever accident management parasites they palm you off on to) have the opposite incentive, as they'll make more stringing it out as long as possible...They were mitigating their loss, keeping costs down for everyone and giving me a good service.
Fatboy said:
CanAm said:
For another point of view, I was hit by a third party shooting out of his drive without looking. While waiting for my undriveable car to be recovered, and within an hour of the crash his insurers (Ageas) phoned me, admitted liability and told me to get a car from Enterprise the following morning. They only had a car from the next size up available and this was agreed with no problem (no Credit Hire nonsense or Accident Management Company involved, of course)
They were mitigating their loss, keeping costs down for everyone and giving me a good service.
That's the irony - you are better off going through the third party insurer as they've got a strong incentive to get things sorted quickly, whereas your insurer (or whatever accident management parasites they palm you off on to) have the opposite incentive, as they'll make more stringing it out as long as possible...They were mitigating their loss, keeping costs down for everyone and giving me a good service.
Post accident courtesy/hire cars are just crazy. Mates mundane £12k hatch was in for repair for over 6 months, took ages because they kept messing it up. During this time he was driving about in pretty much brand new RR velars, mercs, etc. he worked out the hire cars cost the insurer about 10-15k plus the multiple accident repairs. It’s like the insurers audit team have gone v lazy and whole industry has gone unchecked!
loskie said:
the place I work at have a contract with Enterprise Focus sized car £20 per day.
You say it's not your business OP but it is if you are accepting massively overinflated hire charges
It’s not the OP’s business because it wasn’t his car that was involved in the accident, it wasn’t his insurer nor was he involved whatsoever.You say it's not your business OP but it is if you are accepting massively overinflated hire charges
Fatboy said:
That's the irony - you are better off going through the third party insurer as they've got a strong incentive to get things sorted quickly, whereas your insurer (or whatever accident management parasites they palm you off on to) have the opposite incentive, as they'll make more stringing it out as long as possible...
This exactly, I was rear ended earlier this year. I only dealt with the 3rd party insurer and when I mentioned I could probably juggle borrowing the wifes car while mine was being repaired they transferred a £300 incentive into my account to cover me borrowing the wifes car rather than a hire car. Saves a ton of hire fees if you can get away with it.Gassing Station | Speed, Plod & the Law | Top of Page | What's New | My Stuff