Credit Hire Insurance: Reviving the Fleet market

Credit Hire Insurance: Reviving the Fleet market

With the explosion of online delivery services and digital consumerism, now is the time to invest in new commercial fleets to take advantage of this burgeoning market. We take a look at credit hire insurance options for the would-be fleet investor.

As roads get back to near normal full traffic capacity, the logical conclusion is the occurrence of more accidents due to drivers venturing out after such a long period. For those running a courtesy car fleet this could be a busy time with no-fault claims resulting in a deluge of hire car replacements. Here we look at credit hire insurance and how it can impact your courtesy car fleet and leave you protected.

Recent data obtained by Fleetpoint, UK’s largest online fleet industry trade publication, showed that early on in lockdown, there was an 81 percent drop in vehicle accidents in the first two weeks of April compared to the first two weeks of March prior to restrictions being imposed. However, accidents rose by 72 percent in May – a substantial increase even before lockdown was eased after Boris Johnson’s speech on 10th May.

The research provides a clearer picture of the impact of lockdown on motoring and the effects of easing restrictions. Of the type of accidents UK motorists showed, four in 10 non-fault collisions in April were due to parked cars being hit. On the other hand, less road congestion meant rear-end collisions were no longer the most common crashes, representing just 13% of accidents.

What is Credit Hire?

Credit hire is when an interim replacement car is provided by a credit hire organisation (CHO) in the event of a non-fault road traffic accident. Vehicles are then insured to be hired out on a ‘credit’ basis to the non-fault party in the event of an accident. The CHO pays for the car hire whist your vehicle is being repaired. It then claims the hire charges back from the at-fault party’s insurer when the decision is finalised.

If you run a credit hire company, you might have a fleet of cars on hand to be hired out to any party involved in a non-fault accident. As the vehicles will be driven on UK roads, each party and vehicle must be insured by law for the duration of the hire period, which is where credit hire insurance comes in. And this is not just restricted to personal vehicles either. Cars and vans can also be used for any purpose by the hirer with the proper insurance policy permissions in place, such as domestic, social and own business use or even for a private hire taxi.

Credit hire insurance cover could include cars, vans, taxis, minibuses and trucks, all of which could be added to the same credit hire policy. Sports cars, classic cars and high-performance vehicles can also be incorporated. The policy itself should be flexible enough to cover any driver, including young drivers, and have the flexibility to add or remove vehicles from the fleet list where and when appropriate. It is also important that all UK and European geographical locals are included on the cover, especially when it concerns courier and freight transport.

Some credit hire companies can also offer credit repair, whereby they can organise and pay for the vehicle in the accident to be repaired. Like credit hire, this is then claimed back from the at-fault party’s insurer.

Tradex will insure new ventures as well as well-established fleets of all shapes and sizes. We have a reputation amongst claims management companies for providing flexible insurance and can write a policy which has a large all-sections excess, which may be of interest on the basis that you are well placed to manage the smaller element of third party and potential credit hire claims made against you as a courtesy car fleet owner.

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