Minor Car Accident - Decided to Not Go through Insurance

Lscoobydoobydu on 24/05/2016 - 15:19

Hi,

Had a prang in my apartment building's car park with the neighbour's car. I was at fault. Damage to their car comes to roughly $2,500 based on what their insurer has told me. I told their insurer I will pay for it out of pocket since the excess of making a claim through my insurer will come to roughly that amount anyway.

Got a note yesterday in mailbox from neighbour asking for my insurance claim number as they need a replacement hire car whilst the damage to their car is being repaired (to take roughly 7 days).

Question - am I legally responsible for paying the cost of their hire car during the repair period or is this something they should take up with their insurer? I probably have a moral obligation to cover the cost but is there a legal obligation to do so? What would you do?

Cheers

Automotive

Comments

  • Settero on 24/05/2016 - 15:23
    +6

    yes.

    • StewBalls on 24/05/2016 - 20:40

      Based on?

      IIRC the hire car thing is purely a value add by the insurers, not part of the actual legal liability (damages) in the event of an accident.

      Happy to be proven wrong here, perhaps someone with a legal background could chime in, but irrespective of the obvious inconvenience caused by the accident, I don't think the other party's insurer can reasonably expect to recoup that cost from the OP, otherwise you also open the door to any number of potential indirect damages components in a claim.

      • Settero on 24/05/2016 - 21:24
        +3

        because i am entitled to be put into the same/similar position that i was before someone hit my car, there is something on the lines of scope that i can claim if i remember from my intro to law its got to do with foreseeable damages or something , but yea , that's why, i can sue them for it. i have done it before , i requested the rental car ( from other persons insurance ) they said no , i paid for my own rental , sent a letter of demand to the person directly , second check came from their insurance shortly after.

        • kima on 25/05/2016 - 11:23
          +1

          the insurance will pay it but that doesn't mean they have an entitlement under law. the court may say otherwise

      • johnno07 on 25/05/2016 - 15:49
        +3

        Similar to what Settero said. If you have caused a loss, you are obligated to reimburse that loss. If the person requires a car (which is pretty hard to argue against, as it's unlikely they bought it just for the hell of it) then they will need to hire one for the duration of the repair. That cost of hiring is a further loss, with a distinct causal link to the damage you caused. So yes, causing damage to a person can give rise to "indirect damage components", as you put it. Given there is that link of causation, and it's reasonable - of which both are apparent here. Even if the other party goes to their insurer to get a hire car, who did you think the insurer is going to come after to reimburse them?

        Granted if there are arguments then this will all be decided in court.

        • Untameable on 26/05/2016 - 11:21
          +1

          I don't disagree, but why do insurance companies have you pay extra on your premium for a hire car, if you're always entitled to it by default anyway?

        • photonbuddy on 26/05/2016 - 13:13

          @DoctorOwl:
          I think the extra cover you pay for is for when you have an at fault accident and you want a hire car.

  • Euphemistic on 24/05/2016 - 15:25
    +6

    Let them know you are dealing with their insurance company re the payment for damages. Tell them they should contact their insurer about payment for hire car. (I'm not a lawyer and don't know the rules)

    • [Deactivated] on 24/05/2016 - 15:30
      +3

      Basically this. Tell them to contact their insurer

      • Thenarrator on 25/05/2016 - 23:36

        lol and by the time it goes through the chain, it'll be fixed!

    • JimmyF on 26/05/2016 - 11:26
      +1

      thats all fine, BUT you do know the insurance company will just pass the costs on to the OP.

      That $2500 was the cost for the damage, if the OP gets a hire car, it will get added on to the bill.

  • mightyfes on 24/05/2016 - 15:30
    +2

    From what I understand their insurer can arrange a car hire for them if they are covered for it, if their insurer wants to recover the costs they can try to do so from you.

    I'm not certain though I speak from vicarious experience, a family member did get a replacement car hire paid from their insurer for a not at fault accident and did not have to deal with the at fault party's insurer at all. Doubt any insurance company would go out of pocket though, the party at fault/their insurer will likely foot the bill.

  • Ryanek on 24/05/2016 - 15:37
    +1

    If excess is roughly the same why not save yourself the the aggravation and just use your insurer? That's what its for.

    • scoobydoobydu on 24/05/2016 - 15:41
      +3

      I would like to preserve my no claim bonus - since the costs would be the same either way no point making a claim and affecting by bonus. If the damage was way more than the excess then I would claim through insurance w/o second thought.

      • SnoozeAndLose on 24/05/2016 - 15:44

        I have claimed once and the NCB will not all lose. The premium has only been increased for $100 for the following year.
        I am with AAMI.

        • kima on 25/05/2016 - 11:38
          +2

          depending on age and gender. young people especially male, have to pay high insurance premiums, alot higher excess and it affects ncb alot more than $100 for 1 year.

        • SnoozeAndLose on 25/05/2016 - 11:39

          @kima:

          I am young and male late 20's , increased for $50 but it was a minor impact.

        • kima on 25/05/2016 - 11:49

          @LoveBargain15: you said $100 now your saying $50, late 20's is different to early 20's. i had a bump when i was 18 - my own car wasn't affected but got a scratch on the other (it might have just been my paint on their car since my car had no scratch and you couldnt tell) my insurance went up by $400. they value they were giving me for my car was less than the the insurance and the excess combined. it was gio and i paid them the excess to handle it, they refused to tell me what the damages were to the other car or any proof they ever did anything, i suspect less than what i paid in excess. but i couldnt deal with it at the time thats why i paid the excess, i didnt know the impact it would have at renewal time and it was a shock. looking back i still don't regret paying it

        • kima on 25/05/2016 - 14:01

          @LoveBargain15: i just did a sample quote under gio for male 18 year old. the difference between the quote between no having and accident before and having 1 accident before is $350 and that is applied for 3 years after the accident. They valued the car for $2240. The insurance is $1491 excess is $1650 ($850 + $400 for being under 25 + $400 for having less than 2 years experience)

        • Untameable on 26/05/2016 - 11:26
          +1

          @kima: I'm 35, my car was damaged by someone unknown in a parking lot. My NCB went from the top rating down one level, and I agree it was similar to yours in that my insurance went up by ~$400.

          I called them to ask how that was possible. They claimed it was just a standard adjustment because of the NCB. I pointed out clearly that the amount was multiples of the actual percentage discount listed on the website - but the person on the phone had nothing to add about it.

          I'm with the same insurer, but next year when my NCB is back at the maximum, I'll pay the extra for one free claim per year. I will also then start shopping this and all my other insurance around. It left a terrible taste in my mouth.

      • [Deactivated] on 24/05/2016 - 20:28

        I would double check the wording of the policy, some will say that you still won't lose your rating even if at fault, some will say that you need to report it to them even if you don't make a claim (and not reporting it will render your insurance coverage void if/when they ever find out, which they probably will since the other person has put it through their insurance).

  • SnoozeAndLose on 24/05/2016 - 15:40
    +1

    Excess for $2,500 + your own damage is a massive number.

    Can I know what is your car make and model and the insurer? You have owned a nice expansive car to have such a high excess.

    • scoobydoobydu on 24/05/2016 - 15:43

      damage to my car was minimal - the reason my excess is so high is because i chose the highest excess option (lowest premium).

      • SnoozeAndLose on 24/05/2016 - 15:45

        So i want to know which insurer you are with now?

        • scoobydoobydu on 24/05/2016 - 15:46

          GIO

        • SnoozeAndLose on 24/05/2016 - 15:47

          @scoobydoobydu:

          I think AAMI and GIO are under the same company, so you wont lose all the NCB.

          Save yourself the hassle and go through GIO, the damage to your car may be minimal to you, but in fact it may be more than you think.

        • johnno07 on 25/05/2016 - 15:39

          @LoveBargain15: AAMI and GIO are both Suncorp brands. Along with Shannon's, Bingle etc etc

  • 87percent on 24/05/2016 - 15:40

    also, check the place that they're getting the car fixed. They might offer a loaner car. Sister In Law recently got hit, she was going to get a rental but asked the panel beater and they had a car available for them to use (it wasn't anything flash, it was like a Hyundai something)

    • spackbace on 24/05/2016 - 15:49
      +6

      If your car was hit, where you weren't at fault whatsoever, wouldn't you want the replacement to be of the same equivalent as yours? No one wants to be driving around in a bunky, because someone else hit their car.

      • Euphemistic on 24/05/2016 - 16:15
        +3

        A mate's falcon got hit a while ago, other party's fault. The other insurer initially offered a rental that was a little hatchback. Perfectly fine for getting A-B, but not big enough for his family so he requested, and got, an upgrade to a family sized car.

        Having said that I'm not particularly fussy and would be happy with anything that got me A-B as long as it was of reasonable quality and reliable. ie don't give me a 30 year old commodore without AC. If you're car is a high spec model or a rare car you should expect a reasonably modern, reliable replacement, not necessarily an equivalent.

        I've had a Kia Rio as a loan car which suitable for our short term needs despite being horrible to drive and absolutely no comparison to our RAV4 at the time - was very glad to get our car back.

      • StewBalls on 24/05/2016 - 17:14

        wouldn't you want the replacement to be of the same equivalent as yours?

        Sadly, in the real world, we don't always get what we want…sometimes you just have to be satisfied with what you get.

        • spackbace on 24/05/2016 - 17:40
          +5

          Your wife said that?

          I kid I kid :)

        • Settero on 24/05/2016 - 18:29

          but sometimes you get what you need.

        • StewBalls on 24/05/2016 - 20:46

          @Settero: Not always, I've had insurers decline hire car costs in the past.

        • Settero on 24/05/2016 - 21:26

          @StewBalls:
          did you try fight them ? what reasons did they provide ? there are other things you can sue the person for even after insurance has settled everything. insurers don't exactly want to pay , but its hard to deny it as i can just sue the person directly if need be.

        • Hirolol on 25/05/2016 - 15:55

          @Spackbace: OOOOOH

      • Untameable on 26/05/2016 - 11:29

        I think it only has to be the same "class" of car; i.e. passenger, 4wd, van.

        I drive a cheap car, and the hire car I was offered after an incident was a Hyundai i30 which was certainly nice and comparable.

        I agree that it's unfair for some people. If they have a Ferrari then surely they should be allowed to rent a Ferrari.

        • spackbace on 26/05/2016 - 11:32
          +1

          I was referring more to loan car vs hire car. Let's face it, the loan cars at smash repairers aren't gonna be beauties!

        • Untameable on 26/05/2016 - 11:33

          @Spackbace: I've never seen a loan car but yes that doesn't sound good to me.

  • [Deactivated] on 24/05/2016 - 20:31
    +3

    Offer your neighbour to take your car. They are within their rights to say no.

    Technically speaking their insurance will give them the hire car, then their insurance will go after you. You might be able to negotiate their insurance to accept a lesser amount, or you could end up in court if they sue you and then you get a black mark on your credit report. That is fraught with problems like each time you acknowledge your liability to the debt (even if you make a small payment) that resets the statute of limitations. I seriously would not recommend it. And you would be an ass for doing so.

    I'd just make the claim personally.

  • Seraphin7 on 25/05/2016 - 09:15
    +4

    Either way, use your insurance company. While the primary purpose is to provide financial cover in events such as yours, it is also there to deal with all the related hassle. By the time you get through all the trauma of doing this yourself, my bet is the cost of a slightly higher premium (if this even happens) will be well worth the cost.

  • dogboy on 25/05/2016 - 16:03

    http://rentabomb.com.au/

  • apple2016 on 25/05/2016 - 16:56
    +2

    I don't think OP is legally responsible for hire car just because the other persons insurance allows it.
    Most insurance also have a cap on the cost of hire car per day. for RACV complete care it is $88 per day.
    So the car you get will be decided on whats you can afford and not on what car is repaired.
    Also what damages are so severe that it takes 7 days to repair the car and its just $2500?

  • [Deactivated] on 25/05/2016 - 17:02
    +9

    "I was at fault."

    Thank you for being the first person in recorded history to admit to this.

  • gimme on 25/05/2016 - 17:37
    +3

    You have a $2500 excess?? How old are you? What insurance company are you with?

    Personally I would never not put anything through my insurance. There's no such thing as a straightforward situation these days. People change their minds, stories mysteriously evolve. nice guys turn into not so nice once people have a had word in their ears etc etc. Not worth the hassle and uncertainty. Too many horror stories. That's the whole point of insurance - Let someone else do the work

  • stumo on 25/05/2016 - 19:34

    I'm going through this hire car BS myself right now, but from the other side. Seems to me the insurers are running a bit of a scam with this hire car stuff…
    https://www.ozbargain.com.au/node/249621

    • OzJD on 25/05/2016 - 20:24
      +1

      The costs claimed can (and usually do) include a rental car. In OPs case, it's the OPs responsibility to cover that cost (which the other insurer will claim from him, after they've paid for it)

      Basically, it works like this:
      If you have opted for rental car in insurance, your insurance provider will cover those costs (within limits, as per your policy) and if you're not at fault, they will attempt to recover the amount from the at fault party.
      If you didn't opt for rental car, the insurer will not cover the costs. If you're not at fault, then you may pay for a rental and attempt to recover, or (preferably) pass the receipts on to the insurer to recover on your behalf. This option is usually only worth doing if the other person has submitted an insurance claim - if your insurer can't get their money back, they certainly won't be getting your money.

      Stumo, I'd be asking your insurer if you pay for the rental, will they claim the amount back on your behalf - as the other party is covered by insurance, they shouldn't have a problem getting it for you.

    • stumo on 25/05/2016 - 20:59

      Judging by the responses in my thread, OP better just organise directly with the victim, otherwise they could be getting chased by sharks like compass claims, notmyfault.com, or right2drive etc, which the victim could go through. then OP will be paying their cut on top

  • robbie613 on 25/05/2016 - 20:56
    +2

    I reckon you're justified denying them a car hire. It's a convenience cost, that's all. Legally you are required to cover the damages you did to their car, nothing more. Otherwise everyone would claim 'pain and suffering' and 'emotional trauma' and it would end up being $6000. Biggest problem is they will want to choose a repairer. Ask them for 3 quotes to get an average cost. It doesn't matter if you're dealing with them or their insurance company, you will either reach an agreement or go to civil court, which isn't a big deal. You have no legal obligation to go through your insurance if you don't want to - you're choice.

    You'll find their insurance will probably pay for their hire car and pay for the repairs, then go after you for the cost. Critique their bill and offer them half (after a few phone calls and emails).

  • Lucious on 25/05/2016 - 21:16
    +5

    I have worked handling insurance claims for over 10 years with 90% of that in motor claims handling claims for a national claims team where I wad a team manager for over 2 years and have been involved in many claims involving hire car costs that have gone to court in all states. I only mention this because there have been a lot of incorrect opinions in this thread already.

    Firstly, you are responsible for the reasonable hire costs, regardless of how they are incurred (if they organise ir, you organise it, their insurer organises it or another party altogether). As some others have mentioned already, the party who has suffered damage has a right to be put in the position they were in prior to the loss. They had access to a car before the incident so when their vehicle is being repaired and is unavailable to them, they have the right to a suitable replacement.

    With regards to limiting the hire car costs, it will be cheaper if you control the hire because you are invested in doing it cheaply whereas all other parties know you will be footing the bill. I am worried that they asked for your claim number only because of the hire car. There are a number of ambulance chaser hire car companies (esp in Sydney and Melbourne) so hopefully they don't have one involved.

    Find out if their repairer offers a courtesy car. Some repairers will offer a courtesy car for free or for a small fee and this will most likely be the cheapest option for hire.

    If not, offer to organise it for them and source a similar size vehicle. You can use a comparison site like http://www.skyscanner.com.au/carhire (haven't used it so not vouching for it but looks like it would do the trick) to find the cheapest.

    If they refuse to let you organise it, still do the research. Get the best price for the expected repair period for the equivalent size vehicle (you will also need to allow the excess reduction charge too unfortunately but you won't need to pay for fuel so keep an eye out if they have a fuel charge on their bill) and save a copy. If you don't know when they're having it repaired, still do and save the search once a week for a whole week hire period. The third party has a duty to mitigate their loss so their hire costs come in above the prices you have saved, you can stick to your guns and offer only the cheaper price that you can verify. You need to do and save the searches weekly because you will need to show the cheaper hire vehicle was actually available.

    That covers most the bases I can think of at the minute. Good luck!

    • theStinge on 26/05/2016 - 20:14

      Nice to have someone with inside knowledge chipping in.

    • lovepeace on 28/06/2019 - 17:53

      Hi,
      I tried to pm you but couldn't can you please message me as I'm in a sticky and stressful situation now where we're not at fault but the other party is lying and not being liable for what happened as it is clearly their fault. we don't have a car to get around in as our car has been in the smash repairs for over 2 months now and it's taking so long just to finish the car as the quote took 6 weeks just to finalise!

      Thank you

  • newozbargainermelb on 25/05/2016 - 22:32

    Claim through your insurance and let them deal with the other party. It's worth the excess and increase in premium. You can sleep peacefully.

  • keverns on 25/05/2016 - 22:52

    you are responsible for hire cost.

    seems like the your neighbours insurance ask them to organise themselves as they havent got extra coverage. hence asking for your claim number.

    generally most people forget the hire expense due to them thinking court cost/time would be greater, so they tell the other, tuff luck.

    if you are nice enough to be reasonable work it out together. seeing you are neighbours I'd most likely work it out together, unless its something crazy. if your worried about future premiums going up, i believe most companies give you 1 chance of at fault claim per year or a certain period. should be in the pds if not ring anonymously.

    4 yrs ago… i was in a not at fault accident where i had a 10k damage to my entire passenger side, asked for a hire car just to get to a to b even though it would've made my life difficult due to carrying custom made glass, via my insurance. they said no, not on your policy…so ok. ask the person at fault insurances, told me they didnt want to pay…so ok. ask person at fault, also no.

    but no work/no money for 5 weeks, had to find my own lawyers and go thru court myself. ended up winning, having a good 5 week holiday at home and freaking them out with the bill of my average income. but serves them right for not cooperating. they should've just bought me a new car. =)

    if it saves your face with your neighbour, just go thru insurance. glad you even had one, otherwise it could be a nightmare. just think of $2500 excess as a big lesson learnt. plus dont choose maximum excess next time. better yet shop around for another insurance company. ive had strange quotes, same standard excess and premium could vary from 900 to 2000 with all big name companies.

    just got to work out which is cheaper.

  • nickster9999 on 26/05/2016 - 08:25
    +1

    Yes. At law the concept of "damages" is to put the person in as close to the same position as possible but for the negligence taking place.

    So, that is why you hear of multi million dollar personal injury claims. For example, assume you have a doctor seriously injured in a car accident caused by the negligence of someone else. The doctor earns $200K/year. As a result of being made a paraplegic, the doctor can no longer work. At law, his "damages" are therefore partly made up of his income/salary until retirement age: "but for" the negligence of the other driver, the doctor would have continued to earn until retirement.

    In the case at hand, if the person has to wait a week to get their car repaired, they are entitled, at law, to be put in the same position they would have been in had the accident not happened. This would most likely mean they are allowed to rent a car. Of course, they can't go out and rent a Ferrari. It has to be reasonable. If they have a big family and the damaged car was an SUV, then that's what they could rent.

  • 51ngh on 26/05/2016 - 10:08

    They are everywhere …….
    https://forums.whirlpool.net.au/forum-replies.cfm?t=2531969

    • JimmyF on 26/05/2016 - 11:30
      -1

      but seriously…. 9 days to get a headlight fixed? Come on… thats just taking them for a ride!

  • harley on 26/05/2016 - 20:27

    The law requires the other party to show a 'reasonable need' for a hire car, so questions that needs to be asked of them include what they do for a living and can they catch public transport instead. The concept of 'cost mitigation' is also required. It is easier to deal with one party on 2 issues rather than two parties on two issues. It may be easier to try and negotiating for a reduced 'full and final settlement' with an insurer. Any dispute with an insurance company can be taken to an ombudsman without cost to you.

  • MountFranklin on 28/06/2019 - 19:20

    Go through insurance and hire car will be paid for by your insurance.

    Or say no to the neighbour and hopefully they don't take it to court. Or your neighbour may use one of those "not at fault hire car companies" who will pursue you for the jacked up cost of hire car + extra fees for organising it.

    I was in an accident recently (not at fault) and did not have hire car on my policy. Called one of these "not at fault car hire" companies who organised everything and chased the at fault insurance for all costs involved.
    I was asked these questions though by the hire company (I guess if it goes to court, they can say hire car was a necessity:
    What is your occupation ?

    What is the reason for hiring the vehicle?

    What days do you work ?

    What hours do you work ?

    Was another car available to you?

    What do you use the car for?

    • SnoozeAndLose on 28/06/2019 - 21:45

      you are responding a 2 years old post

      • MountFranklin on 28/06/2019 - 22:01

        Ah the post came up again because of this comment.

        Sorry if my comment is a problem for you

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