Head of the Credit Hire Organisation told Insurance Times that collaboration between credit hire firms and insurers has never been closer.

Kirsty McKno, chair of trade body the Credit Hire Organisation (CHO), has said that it is in the interest of both underwriters and credit hire companies to ensure that clients are not charged excessive rates for vehicles.

She was speaking in the wake of a recent court case, where a credit hire firm had sought to charge a driver £400,000 for a replacement vehicle. Law firm Keoghs, which represented Aviva in the case this month, said it had six other claims on its books where credit hire organsations had invoiced for sums in excess of £100,000.

Customer service

McKno said there had been a great deal of work undertaken by the CHO and the General Terms of Agreement for Insurers and Credit Hire Companies (GTA); members of the GTA sign the agreement in order to take a responsible approach to credit hire costs, working with insurers to ensure clients do not lose out.

Kirsty McKno

Kirsty McKno, chair of the CHO

“As an organisation, we are working to ensure that our members do not issue high value invoices,” she explained. “It is against our members’ interest to do so. It will likely lead to a refusal to pay from the insurer and end up in litigation, which can result in cashflow issues for credit hire firms.

”If an invoice is refused and we have to take court action, it may well be 18 months before the issue is settled and you are faced with having to ask your client, who has only used your services due to an accident, to come back to court some time later to help you argue the case.”

McKno added: “As companies, credit hire firms have FCA obligations in order to operate and as such we need to ensure we treat the customer fairly. It is really important when we speak to clients, many of whom will have been referred by their insurer, it is not a case of them and us in terms of the insurers.

“We have to make it clear that the responsibility to pay lies with the clients and as such we need to ensure they are aware of the process and the charges involved.”

Industry collaboration

McKno said that the CHO continues to work with the insurance market to combat fraud because the impact is not simply confined to claims payments, but also to the reputation of the industry.

“Every industry has bad apples, but we are confident none of our member companies operate in such a way,” she said.

“The aim is to work together to reduce friction in the process for the benefit of the clients. The credit hire companies have matured considerably in recent years and that process will continue.

“There will always be issues that arise and need to be addressed and the market will continue to develop. Outside influences such as Brexit can and will impact in the costs of credit hire; we are, for instance, looking at the rising costs of metal and other vehicle parts and its impact on the market and the wider automotive industry.

“Via the GTA, we are regularly looking at the rates that we charge for our services. We have looked at increasing rates for some sectors and lowering them for others.

“This market is dynamic, and I can say that the collaboration between the credit hire companies and the insurers has never been greater then it is at present,” McKno added.