Hire car following an accident
I am often asked "can I get a hire car" after a car accident has occurred.
If the accident is not your fault
If it is not your fault, then there is the ability to claim against the third party who is at fault, but it must be reasonable costs and you will normally need to obtain the third party's drivers licence details and Insurer details before your Insurer will pay these costs and seek recovery.
If the accident is your fault
You can only claim a hire car if you have the hire car extension in your policy when the accident was your fault.
If your car is stolen
The majority of policies will cover the reasonable costs of a hire car after theft (sometimes a limited amount in the wording) until the car is recovered or has been deemed a "write off" by the Insurer - generally because they believe that it will not be found. If found, you will not get ongoing hire costs whilst the car is being repaired unless you have a hire car extension that covers ongoing hire car costs.
Be wary of third party companies who offer car hire after accidents
Insurance News Australia recently reported how Insurance companies are cracking down on credit hire companies who charge over the odds for hire cars after accidents and promise your insurer will pay the costs: "Drivers who accept vehicles from credit hire companies after car accidents could be left thousands of dollars out of pocket following a series of NSW Supreme Court decisions. An appeal case has drawn a line under exorbitant fees charged to insurers by such companies, which provide replacement hire cars to not-at-fault drivers with the promise that the at-fault driver's insurer will later cover the cost. In Nguyen v Cassim, credit hire company Right2Drive provided a hire car to Azad Cassim after his BMW sedan was involved in an accident with a vehicle driven by Dylan Nguyen, who was found to be at fault. Right2Drive later charged Mr Nguyen's insurer a rate of $204 per day for a Nissan Infiniti over 84 days, for a total cost of more than $17,000. This was alleged to be well above the market rate."
Expensive prestige hire cars are not necessary after accidents and aren't always covered
After the NSW Local Court granted the full amount as damages to Mr Cassim, the Insurer appealed the decision. The NSW Supreme Court found that the test for a claim of damages is one of need, not actual financial loss, and that a cheaper vehicle such as a Toyota Corolla would have met Mr Cassim's needs for less than half the cost. The court scrapped the previous orders and awarded $7476 to Mr Cassim. In two concurrent cases, reduced amounts compared to the actual hire cost were awarded in the first instance, on the basis that a prestige car was not needed to meet the needs of the claimants. The Insurance Council of Australia has welcomed the rulings. "Exorbitant replacement vehicle claims have put pressure on the cost of motor vehicle insurance for consumers in recent years," a spokesman told insuranceNEWS.com.au. To discuss your cover reach out to Clare.
Advisr does not provide advice and does not hold a financial service license (AFSL). All information above has been provided by Clare Smith.