Car insurance and the little-known world of credit hire companies

When another driver hit Jane Ashdown’s car she was given a temporary replacement vehicle with gratifying speed. The reason for this alacrity became clear when she discovered that the company which organised the three-and-a-half week rental was demanding £4,216 from the third-party insurer.

Now Ashdown* has been drawn into a legal action involving the insurer of the car she was hit by and the company which arranged her hire car. The insurer refused to pay and to Ashdown’s horror, hire company Claimfast is taking it to court in her name to recover the money. The case shines a light on the poorly understood area of credit hire companies (CHCs) which have caused controversy within the insurance industry.

CHCs emerged in the 1980s and pay insurers and brokers large referral fees to manage no-fault claims. Their profits are made from arranging repairs and replacement cars at often greatly inflated cost, then demanding the money from the third-party insurer. Read more about the Car insurance and the little-known...

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26 May 2018

By Anna Tims