The Knock-for-Knock Agreement in Car Insurance: A Quick Overview
According to the motor vehicles act of 1988, it is mandatory for every vehicle to have a third party liability car insurance policy. You can also opt for a Comprehensive policy to get coverage for your vehicle. Further, you can choose add-on covers like bumper to bumper car insurance, NCB Protect, engine protect, etc., to boost the coverage of the policy. You can go online to compare car insurance plans and customise the best one for your vehicle. This ensures that in the event of an accident, mishap, or disaster, you are financially protected.
While most policyholders are aware of all the benefits offered by a car insurance policy, most are unaware of the Knock-for-Knock agreement during third-party claims. Today, we will explain what this agreement means and how it can benefit you.
Knock-for-Knock Agreement in Motor Insurance
Let’s say that you are driving on the road and another car loses control and collides with your car. As a result, your car suffers damage. This makes you eligible for a third-party insurance claim from the other person’s insurer. However, this usually involves a court case that can take time and involve a lot of hassle.
Therefore, the General Insurance Council came up with a knock-for-knock agreement in motor insurance that offers the following solution:
- The insurer of your car will pay for the damages caused to your car
- The insurer of the other person’s car will pay for the damages to his car
- There will be no need to take the case to court
- The responsibility is shared, and the repairs are done quickly
Benefits of a Knock-for-Knock Agreement in India
In a road accident, it is very difficult to prove who was at fault. Hence, in most cases, the court takes months to come up with a judgment. Unfortunately, this means that you will have to wait for many months before expecting a settlement of your claim. Additionally, you will spend a lot of time and effort going to court and following up with your insurer.
With the knock-for-knock agreement in India, you can settle the dispute amicably without having to go to court. In addition, since the insurers of both the parties in the accident pay for the repairs of the vehicles insured by them, your vehicle can get repaired in no time.
Exclusions of a Knock-for-Knock Agreement in India
The Knock-for-Knock agreement is an option provided by the insurer to the insured. If you opt for a settlement via this agreement, then you can lose the No Claim Bonus accumulated by you. This agreement comes into play only for its own damages. Hence, you need to have a Comprehensive car insurance policy to opt for the Knock-for-Knock agreement. Further, this agreement will be offered only if the accident takes place within the geographical limits of the car insurance policy. Lastly, the maximum amount that you can receive cannot exceed the IDV or the maximum sum insured under your policy.
While car insurance policies are designed to help car owners manage costs in the event of damage to themselves, their car, or a third-party person or property, the process of receiving a reimbursement can be time-consuming. A Knock-for-Knock Agreement is designed to help both the car owners in an accident get compensated for repairs within no time. Before you purchase a Car Insurance policy, talk to your insurer about the availability of the Knock-for-Knock Agreement and understand the terms and conditions of the same. This can help you get a claim settlement in a hassle-free manner. Also, get a quote for car insurance and compare four-wheeler insurance prices before you buy a policy for your vehicle.