Hire car entitlement – beware the pitfalls
Fleet operators have been warned to be extra careful when using credit hire to replace vehicles taken off the road by a no-fault crash. Typically, when company drivers are involved in a crash that is not their fault, they are entitled to a replacement vehicle on credit hire whilst their vehicle is replaced.
However, the Court of Appeal has ruled that companies with access to any spare vehicles -such as a fleet with pool vehicles – must not take advantage of credit hire. If they do, they may not be entitled to recover the costs.
The thrust of the 17 page judgement states that a company should mitigate its loss following an accident by ensuring any spare vehicles are used before incurring hire charges. This particular case involved a car dealer as opposed to a fleet, but the decision will apply to any company with a fleet.
In theory, this case could have significant impact on the fleet rental market as insurers now have a clear argument in situations where they are able to prove a company had spare capacity within its own fleet. The case in questions had claimed £30,000 in credit hire charges despite having a large stock of cars. The damaged vehicle, an Audi A6 Quattro was being driven by a manager when it was involved in a collision. The court ruled that a replacement vehicle could have been sourced from an available pool of 64 cars and therefore there was no need to hire a separate vehicle.
On the topic of replacement vehicles, a wise fleet manager will check his insurance policy to establish exactly what he is entitled to should he require this type of cover. Fleet insurance is a specialist field and it always advisable to consult a professional insurance company who can help with the 'small print' involved. With this legal precedent in place, it is worth checking the definite standing of your replacement vehicle policy to ensure no nasty surprises are in store – and that goes for private insurance as well as fleet and commercial.
Contact Westhill Insurance Services, today.