Insurance insights: Devil in the detail for replacement vehicles

It’s a popular misconception among policy holders that the insurer provides a courtesy vehicle while their own vehicle is in for repairs post-accident. The truth of the matter is that while the insurer’s recommended repairer is obliged to provide a courtesy vehicle for the duration of repairs only, it is them – and not the insurer – that provides this benefit. This means that if your vehicle is the subject of a non-recovered theft or a ‘total loss’ accident – and no repair is required – there will be no provision of a courtesy vehicle.

All courtesy vehicles are provided subject to availability and it is worth noting that most repairs are not obliged to provide you with a like for like replacement of your own vehicle.

In simple terms, this could mean that you are without your van for a few weeks and have to use a very basic hatchback. In more serious matters, it could result in drivers not getting the benefit of a replacement refrigerated van, dropside or tipper, which impacts on your day-to-day business activities.

Many fleet operators will have arrangements with a local repairer and prefer to use someone who knows and understands their fleet in the event that a vehicle will be off-road under repair. However, these outfits may not be an ‘approved-repairer’ of your insurer and a courtesy vehicle is left to your own negotiations and relationship. In this instance, it can also mean a delay in repairs as any works will need to be signed off by the insurer’s engineer, before they touch the vehicle.

In addition to the above, repairs via any garage are currently suffering from a delay in getting appropriate parts and a lack of workforce. Factor in the combined storm that is post Covid-19, Brexit and the ongoing hostilities in Ukraine and delays are inevitable.

Repairers are reluctant to take in vehicles pending repair and provide a courtesy vehicle without the necessary parts being onsite. Many will try to discourage you to start repairs if the vehicle is roadworthy, to help manage their own backlog.

Some insurers are trying to relieve the pressure on the repair network by providing a ‘credit-hire’ vehicle. While this solution can result in a more suitable courtesy vehicle (a more like-for-like replacement) this is usually only an option in the event of a non-fault claim, where there is a guilty third-party against whom the insurer can recover the costs.

Another misconception is that the insurance for the courtesy vehicle provided by the repairer or hire company is automatically included within the existing policy wording. More and more insurers are asking the policyholder to add the courtesy vehicle to their own policy for the duration of repairs adding an additional insurance cost.

Alternatively, they are insisting that the courtesy vehicle replace that of your own vehicle on the schedule for the duration of repairs, while your vehicle would be covered by the repairer’s own insurance. This situation does mean that there is cover for your vehicle while under the custody and control of the repairer – think about you having to claim against their insurance policy beyond your control and subject to terms and conditions of which you have no prior knowledge.

As with everything insurance, the devil is in the detail. Not all insurers apply the same processes and endorsements – and there are policy add-ons you can purchase in advance that will guarantee a replacement hire vehicle of your choice for the set period of time.

Before accepting cover from any insurer/broker, ask them to explain in full the claim process including a guarantee on the repair, using approved parts and the provision of a courtesy vehicle.