Step 1. The other party is trying to recover hire car costs
In car accidents, the person at fault is legally responsible for the damages. What can be claimed If you are at fault, you must pay the other party (or the insurer) for:
- The lesser of:
- the cost of the repair; or
- the market value of the vehicle LESS salvage value
- PLUS towing costs
- PLUS hire car costs, lost wages or profits (called “demurrage”)
- the other party’s insurer, who is also claiming the other party’s repair costs
- the other party
- a credit hire, demurrage or claims management company - see our What do I do if I receive a demand for hire car costs from a credit hire company? fact sheet.
- what was the daily rate and length of hire?
- what was the make/model of the hire car?
- how long the car was at the smash repairer being repaired?
- checking the rates charged by other car companies in the same area as the other party for a car that is reasonably comparable to the one that was damaged
- checking whether the time the hire car was used was reasonable by looking at how long the damaged car was off the road, and asking a smash repairer to give you a written opinion about whether the time taken to repair the damage was reasonable.
- Sample letter disputing hire car costs on our website
Confirm any settlement in writing You should always get any settlement confirmed in writing. You should also be clear on what it is you are settling – is it all losses arising from the accident, or just the cost of repairs, or just hire car costs. If you only settle the repair cost, you can be chased later for other costs (e.g. hire car) from the insurer, or the other party directly. To find out how to confirm a settlement, see:
- Put it in writing on the LawAccess NSW website
- Sample terms of settlement on the LawAccess NSW website.