By Legal Futures Associate Auto Claims Assist
Following a non-fault road traffic accident, the legal principle of negligence is clear: the at-fault driver is liable for the costs and losses incurred by the innocent party. An Accident Management Company (AMC) plays a vital role in managing this process, ensuring the claimant is not left financially disadvantaged.
This article explains how companies like Auto Claims Assist provide a start-to-finish service, including vehicle repairs and a comparable replacement vehicle, at no cost to the non-fault driver.
The guiding legal principle
UK law is built on the principle of putting the non-fault party back in the position they were in before the accident occurred (restitutio in integrum). This means the person who caused the accident is legally responsible for covering all genuine costs and losses.
This legal entitlement includes:
- High-quality repairs at a BSI Kitemark-accredited repair centre, using manufacturer-approved parts and paint.
- A comparable replacement vehicle for the duration of the repair period or until a settlement is paid for a total loss.
How the process is funded: The credit hire agreement
To ensure the claimant faces no upfront expense, services are provided under a credit hire agreement. This is the contractual mechanism that allows us to arrange for vehicle repairs and a replacement car immediately.
Essentially, we cover the costs on the claimant’s behalf from the outset. Once the claim is settled, we recover these costs directly from the at-fault driver’s insurance company, which in turn settles the credit agreement in full.
Managing Financial Risk for the Claimant
The credit agreement clarifies that while the claimant is technically liable for the charges, our role is to pursue and recover these costs directly from the at-fault insurer on their behalf.
In the unlikely event that costs cannot be recovered, the charges are written off, provided the claimant has cooperated with us and followed the terms of the agreement. This is often known as a ‘contingent liability’, functioning similarly to a ‘no win, no fee’ arrangement, which helps to protect the claimant from financial risk.
A transparent business model
Our revenue is generated from the daily hire rate of the comparable replacement vehicle we provide. This rate is a component of the costs recovered from the at-fault party’s insurer at the conclusion of the claim.
As members of The GTA, Auto Claims Assist charges vehicle hire rates that are pre-agreed with most major UK insurance companies, ensuring a smooth and efficient recovery process.
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