Insurers challenge the fledgling industry

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Insurers, however, disliked paying for this new motor policyholder service and challenged the need for any payments.

While the total size of the credit hire/repair industry was very small in relation to all the claim payments made by insurers (well under 5%) this new type of claim and increased payouts brought insurers together to seek to control these costs. They chose a variety of means including challenging the legal basis of what was being provided, refusing to pay claims to starve the CHOs of cash, as well as limiting the cost of individual claims.

The insurance industry spent heavily on legal challenges. They contested the validity of individual claims, adherence to the Consumer Credit Act, requirements to mitigate claims and many other areas. Once the legality of credit hire was established they tried to challenge the level of charges. There was a concerted effort by insurers to starve CHOs of cash flow and to tie them up in continuous litigation.