LTDA taxi rep warns cabbies to keep ‘eyes wide open’ when accepting insurance connected courtesy cab

The Licensed Taxi Drivers’ Association (LTDA) has warned cabbies to keep their ‘eyes wide open’ when it comes to accepting insurance connected courtesy taxis.

The taxi representatives have urged taxi drivers to read the small print thoroughly before committing to a replacement taxi if they find themselves involved in a non-fault incident.

Lloyd Baldwin, LTDA Executive S.O, said in TAXI Newspaper: “If you’re unfortunate enough to be involved in a non-fault accident, and it is a clear case that it is non-fault, you will usually be in contact with a company connected to your insurer, who will handle the claim. They usually offer a replacement cab while yours is fixed. Drivers in these circumstances are, as you would expect, keen to get back to work and so generally take up the offer of a cab, without hesitating. I am sure that many don’t read the small print and from what I've seen, some assume it’s like being supplied a courtesy car when yours in for a service, but this is NOT the case and I wanted to make readers aware.

“The company is actually hiring you a cab on ‘Credit Hire Agreement’ terms. You are not asked to make any payment for the cab at the time, but you are technically liable for the hire costs, which can be significantly more than what you might expect them to be per day.

“The idea is that your insurance company adds the price of this cab rental onto your losses, and it becomes part of your insurance claim, which the insurer of the third party (the person who was at fault in the accident), must cover. However, if issues arise with your claim, you could get caught out, and even find yourself being asked to cover these costs or go out of your way to help your insurer recover them. For example, if it turned out at a later stage that there was evidence of fault on your part and the claim was thrown out, you could be left footing the bill.

“I’ve also recently seen a case where there was debate between the two insurers about whether the cost of hiring the cab was justifiable. This was because the driver's loss of earnings while their cab was out of action, would have been less than the price of hiring the cab.

“The company acting on your behalf will work to retrieve the money, but when you sign one of these credit agreements you are agreeing that you will “take all reasonable steps” and provide “all possible assistance”, to them in recovering the costs from the negligent third- party’s insurance company.

“In practice, I’ve seen drivers forced to go to small claims court and give evidence to help their insurer sue the other party’s insurer. This is less than ideal, as it means a driver taking time away from the cab. I am also told that if you are asked to attend court, there is a flat rate of £95 for your loss of earnings for that day. You can also be forced to turn over your financials as evidence, which can be intrusive.

“Of course, I am not saying don’t take up the offer of a cab. In most cases everything goes smoothly, and a court appearance like that is rare.

“If you are unlucky enough to be in an accident that is not your fault and are contacted and asked if you need a cab, please just take all the above into account. I am not for one minute saying stay away from it, but please ask questions, enter into these agreements with your eyes wide open, and don’t think for a minute it’s a simple courtesy cab.”