Consumer complains they shouldn’t have been referred for credit hire services

Motor Insurance

Sophie was unhappy her insurer provided her with a hire car and not a courtesy car following a non-fault accident. She was asked by the credit hire company to pay for the hire costs.

What happened

Sophie called her insurer to make a claim following a non-fault accident. Her car repairs were carried out under her insurance policy – but after asking her insurer about her policy’s “courtesy car” cover, she was instead referred for a hire car under a credit agreement.

Sophie discovered her replacement car was a hire car when the credit hire company asked her to help them recover their hire costs from the third-party insurer who refused to pay. They said they’d ask her to cover these costs if she didn’t provide the personal financial information they needed to pursue their case. Sophie was upset and contacted us for help.

Her insurer felt the courtesy car cover wasn’t suitable because it only entitled Sophie to a car while hers was being repaired. As her car was scheduled for repair three days after the accident - she’d have been without transport for a few days if she waited to claim under her policy.

What we said

In the initial call, Sophie said she wanted to use her “courtesy car” cover. The agent arranged a temporary car for her but didn’t explain it was a hire car. We also found the insurer failed to mention any risks of using hire car services.

Sophie said she only needed a car to get to work, a short distance away. Had the risks of credit hire been explained, she said she would have used a friend’s car, taxis or cycled to get to work until the courtesy car was available. Given her circumstances, unwillingness to take risk, and the limited need for any hire car, we were persuaded she wouldn’t have agreed to credit hire.

We said we didn’t think Sophie was treated fairly and that we thought she’d have acted differently.

We agreed Sophie was upset after finding out for the first time, months later, that she was given a hire car. We also said she experienced further distress and inconvenience from having to help in the recovery of the credit hire costs – something she wouldn’t have to do had she used her courtesy car cover. We also acknowledged the third-party insurer had eventually agreed to pay the credit hire costs.

We recommended the insurer pay Sophie £350 for the distress and inconvenience caused.