Someone recently reversed into the back of my car. Feeling a bit rattled and not wanting to make a scene I did not get all the information I required to ensure a smooth process when it came to recovering from her insurance.
Unfortunately, the reality is that often a person who has been responsible for causing an accident changes his or her story when it comes time to claim. Because of the way the insurance industry operates, you might find that your insurer is not particularly helpful in resolving the issue. This is because most insurance companies are part of the Knock for Knock agreement, says Rene Otto, chief executive of online insurance company MiWay.
This is an agreement between insurance companies where each insurer bears the cost of its respective client’s repairs and the guilty party pays the insurance excess. The idea is that, in the long term, it all works out in the wash for the insurance companies because 50% of the time their client would be the guilty party and vice versa, so why waste legal time and money trying to get money back from another insurer when the next time it could be your client being sued?
The problem is that if the guilty party denies it was his or her fault, there is no real incentive on the part of the insurer to argue your case and get the excess back on your behalf because the cost of litigation could exceed your excess which is seldom above R5 000. Otto says insurance companies normally do not allow more than two pieces of correspondence before they call it quits. At the end of the day you, as the client, will have paid the excess and the insurer will be increasing your premiums anyway.
Danny Joffe, senior legal adviser at Hollard Insurance Company, argues, however, that the Knock for Knock agreement does in fact work for the customer. Because the claim against the other party’s insurer is just for the excess and does not exceed R5 000, the insurer is more likely to pay and the process is far quicker.
If your insurer was suing for the full amount, for example R50 000, then it would be in the interests of the other insurer to challenge the claim and draw out the process. Otto says MiWay has chosen not to take part in the Knock for Knock agreement and it will sue the guilty party for the full claim. This will make it financially viable as it is not just suing for the excess. Part of this strategy is to employ skilled people who are more vigilant about following up claims. “We believe we get more joy for the client if we are not part of the Knock for Knock agreement,” says Otto.
A recovery from the guilty party is extremely important. Apart from the fact that you are paid back the excess you paid upfront for the repairs, it also restores your no-claim bonus and your premiums are not increased.
“Normally, once a recovery has been made, your insurer should restore the premiums back to the levels at prior to the claim and pay back what you lost as a result of paying higher premiums,” says Joffe, who adds that while there is no legal obligation to do this by the insurer, it would have some serious explaining to do if it did not have a policy to restore the premium once a full recovery was made. As a consumer it is a good idea to check if your insurer follows this policy, especially if your insurer has an “out” bonus arrangement as this could be affected even in the event of a recovery. Joffe says the problem of responsibility can be an issue when it is one person’s word against another’s.
He says recovery clerks have huge volumes of claims and will therefore focus on more clear-cut cases. However, if you are unhappy with the way your case has been handled, you should take it to the head of the division.
At the end of the day it is cheaper for an insurer to retain a quality client than to sign up a new one, so a good insurer should be client-focused. Joffe says there are attorneys who work on risk and will attempt to get the insurer or client to pay, however, if there is no compelling evidence to prove who was in the wrong. Then it becomes a difficult case to fight.
“It is amazing how many people acknowledge they were in the wrong at the time of the accident, but when it comes time to telling the insurance company what happened or paying back the cash, the version changes,” says Joffe. He says this makes it crucial to have an independent witness where possible. To speed up the claims process, you also need to obtain as much information at the time of the accident as possible.
What to do
When you are in a car accident the information you collect at the scene will make a big difference to your claims process:
Ask to see the other person’s driver’s licence and jot down the driver’s full name and identity number. People often lie about their details.
Take full details of the vehicle — the colour, make, model and registration.
Get details of the other party’s insurance — this allows recovery action to start immediately.
Don’t admit liability or encourage the other person to do so. Many insurance policies have clauses stating that one is not allowed to admit to being wrong and if this is done, the claim can be thrown out.
If possible go with the other party to the police station to ensure his or her statement is correct.
Find a witness. A witness is the most important factor in proving your case against a negligent driver.
Take a photograph and include damages to both motor vehicles, damages to any stationary objects that might have been involved in the accident, such as trees and road barriers. If possible a shot some distance away from the accident scene is always good.
If one has an insurance policy, one should claim through one’s own insurance company and not rely on the other driver’s insurer.
By law both parties have to report any accident to the police.