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A not-so-popular insurance term but very useful for policyholders, this blog details the meaning of the knock-for-knock agreement and how it helps the insured.
While there does exist a provision on paper in motor insurance that protects a person against damage caused to vehicle or self due to the fault of a third-party (known as Third-Party Liability), the reality can be somewhat different. According to the Third-Party Liability Policy, the person affected must prove first to the Motor Accident Claims Tribunal that the accident was caused by the negligence of another driver (third-party). Only then can the affected be compensated for the damage by the car insurance company of the third-party.
However, as can be seen, this process can be extremely long and tedious because it involves proving the fault of another person in a court of law. One may or may not succeed in doing so. To ensure fairness to the affected party, therefore, there is a provision in motor insurance called the knock-for-knock car insurance claim.
It simply refers to an agreement between two car insurance companies, stating that in case of a road accident, each company would compensate their respective policyholders for the damages caused under the own-damage cover benefit held by both the customers. This saves a lot of time, hassle, sometimes even disappointment among either affected party in getting their fair due.
Due to the mutual agreement between the two insurers, each of their customers can then receive the benefit or compensation for their damages without the need to undergo a long and cumbersome legal procedure. However, note that this benefit of knock-for-knock insurance is only available if both the parties involved in the accident hold a comprehensive car insurance policy.
Here are some of the important features of this agreement that you should know:
Here are some of the benefits of this agreement both for the insurer and the insured:
Read More: Car Insurance Policy Benefits and Features
Although knock-for-knock insurance is extremely useful in expediting accidental-damage claim settlements, there are certain areas that are excluded from this cover benefit:
Even though knock-for-knock insurance is not law-mandated but more of an understanding between two insurers, it works really well in the favor of both the insurer and the insured parties involved in the claim. It is really helpful in expediting the claim-settlement process, saving an immense amount of time, energy and money, which can then be used toward faster repairs of the vehicle.
It only makes sense then to avail the benefits of knock-for-knock insurance agreement as part of your comprehensive car insurance policy. Also, if you’re looking for the best car insurance online, do check out PayBima, which offers a variety of options both for fresh issuance of motor insurance policies as well as for car insurance renewal.
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