Credit hire companies and motor insurers in the UK have agreed to a series of reforms to the General Terms of Agreement (GTA), aiming to lower costs and improve mobility solutions for motorists requiring replacement vehicles while their own cars are being repaired or replaced.
The revisions, announced by Anthony Hughes (pictured above), chair and CEO of the Credit Hire Organisation (CHO), and Pete Highfield of NFU Mutual, who leads the new GTA Strategy Board, introduce measures intended to streamline processes, reduce disputes, and improve outcomes for accident victims.
The reforms include the implementation of an annual independent review of vehicle hire rates using market data, a mandatory arbitration process for unresolved cases after a set timeframe, the introduction of penalties for late payments, and clearer guidelines on the scope of disputes during arbitration.
Hughes described the updates as the result of an 18-month collaboration between credit hire companies, insurers, and the Association of British Insurers (ABI).
“Our strategic objective has been clear from Day 1; reduce or ideally remove frictional costs and put consumers at the heart of the accident management process,” Hughes said.
Highfield also said the changes aim to create a fair and efficient system for accident victims, reducing the need for litigation through compulsory arbitration. He added that the revised process is designed to reward operational efficiency and lower claims costs while improving the experience for policyholders after an accident.
“We want the real winner to be the consumer by making the post-accident journey as good as we can and to avoid dragging policyholders through the courts,” he said.
Hughes highlighted the potential impact on the judicial system, estimating that the reforms could prevent as many as 100,000 credit hire cases from reaching County Court annually. This reduction, he said, would alleviate the burden on the civil justice system while expediting resolutions for motorists.
The revisions are also expected to help manage the cost of credit hire claims, which could have a broader impact on motor insurance premiums. Hughes connected these changes to the objectives of the Motor Insurance Taskforce (MIT), noting that the CHO supports the Taskforce’s mission to influence policies and practices within the motor insurance market.
He further expressed the CHO’s willingness to assist the MIT in addressing mobility issues that may arise in claims processes.
In a letter to Transport Secretary Louise Haigh MP, Hughes outlined how the GTA reforms could reduce frictional costs within the claims process, ultimately benefiting motor insurance policyholders.
“For more than 40 years, our members have played a vital role in the provision of mobility solutions for insurance policyholders who have suffered a road traffic accident, assisting hundreds of thousands of policyholders annually, providing then with the ability to get to work, or take their children to school, while their own vehicle is off the road, through no fault of their own,” Hughes said.
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