How to Claim Car Hire Costs After a Not-at-Fault Car Accident in Queensland

If you have been in a not-at-fault motor vehicle accident in Queensland, your main priority is getting your car fixed and back on the road. You may be entitled to claim the costs of hiring a replacement vehicle while your car is repaired or assessed.

It is not a simple process, with options depending on who has insurance and what type of cover they hold. This guide outlines three common scenarios and how a letter of demand can help recover hire car costs when the at-fault driver doesn’t have insurance or won’t cooperate.

Three insurance scenarios

The outcome of your hire car claim depends on the insurance position of both drivers.

Scenario A: You have comprehensive car insurance

You hold comprehensive insurance on your vehicle, regardless of whether the other driver is insured.

Your pathway:

• Claim against your comprehensive insurance for damage to your vehicle.
• Your policy may include hire car costs (optional extras) as part of the cover.
• If it does not, you can claim reasonable hire costs directly from the at-fault driver or their insurer.

This is usually the fastest, most straightforward route. Your insurer will handle all of the repairs to your vehicle.  You may need to send demand the other driver pay for hire car costs.  You should talk to your insurer first to see if they are willing to cover the cost of a hire car.  If they won’t, send a letter of demand to the other driver demanding they pay for the cost of the hire car.

Scenario B: You do not have comprehensive insurance, but the other driver does

You do not have comprehensive cover, but the at-fault driver has comprehensive or third-party property damage insurance.

Your pathway:

• Obtain the at-fault driver’s insurer details at the accident scene if possible, including the number plate of the car.
• Ask the at-fault driver to lodge a claim with their insurer.
• Once accepted, deal directly with their insurer for repair and hire car costs.
• Provide proof such as photos, repair quotes, hire-car quotes, and receipts.

Liability assessment can take 2–4 weeks but hire car costs are usually approved promptly once responsibility is accepted.

The insurer is required to provide you with a ‘like for like’ hire car.  So if you have an SUV, they should be providing you with something similar.

Scenario C: Neither party has insurance

The at-fault driver has no insurance or insufficient insurance, or refuses to cooperate with their insurer, and you do not have comprehensive cover. You are facing repair and hire car costs with no clear recovery pathway.

In this situation, a formal letter of demand becomes necessary. It shows you are serious, sets out your legal position and often prompts settlement before further action is needed. Uninsured or uncooperative drivers often respond when they receive formal legal correspondence that clearly outlines your rights and intention to pursue payment.

When Standard Insurance Claims Aren’t an Option: Using a Letter of Demand

A letter of demand is the next step in Scenario A (to claim hire car costs if your insurer won’t cover them, and Scenario C when the at-fault driver has no insurance or their insurer refuses to cooperate.

What is a letter of demand?

It is a formal written notice that:

• Identifies the at-fault driver and states their responsibility for the accident.
• Lists your verified losses, including vehicle damage, hire car costs and related expenses.
• Sets out the total claim amount with supporting documents.
• Requests payment within a set timeframe, usually 14–30 days.
• Warns that legal action may follow if payment is not made.

Although not a court document, it has legal significance and shows you made a clear, documented demand before starting court proceedings.

Why a letter of demand works

Many uninsured drivers do not realise they are personally liable for damages caused by their negligence, and a formal letter often encourages early settlement. If an insurer is unresponsive, a letter of demand can push them to review the claim and engage more constructively.

It also creates a written trail showing you attempted to resolve the matter before making a formal claim, which courts and tribunals usually expect.

Download Letter of Demand Template 

Your legal right to claim hire car costs

In Queensland, if another driver is legally at fault, they or their insurer must cover reasonable hire car costs while your vehicle is repaired. This flows from the principle of mitigation of loss, which allows you to take reasonable steps to reduce the impact of the accident. You are entitled to a ‘like for like’ replacement, as recently confirmed in the High Court decision of Arsalan v Rixon.

In practice, this means:

• You can hire a vehicle of similar size, type and standard to your own.
• You are entitled to a like-for-like replacement, not an upgrade or downgrade.
• Reasonable hire costs can be recovered as part of your damages claim.
• Ancillary costs such as fuel, tolls and mandatory insurance linked to the hire car are usually recoverable if documented, but can be offset if they are expenses you usually would have incurred anyway.

Other costs not covered may include:

• Luxury upgrades when you usually drive a standard vehicle.
• Hire periods extending beyond a reasonable repair timeframe.
• Excessively high daily rates (make sure you receive a commercially competitive rate).
• Optional extras (such as GPS or premium insurance) unless genuinely necessary

Did you know this about car hire costs?

If you have been injured in a car accident in Queensland and the other driver was at fault, you may be looking for information about car hire costs and the separate CTP process for personal injury.

Best Injury Lawyers offers a free initial consultation and can explain how the legal process works, the time limits that may apply, and our engagement terms. We are prepared to act on a no win no fee basis, fund disbursements on the client’s behalf so they are only payable if the matter is successful, cap legal fees at 30% + GST, and do not charge an uplift fee. Contact our office to make an enquiry.

Important legal disclaimer: This information is general only and is not a substitute for legal advice tailored to your situation.