This is an
agreement between motor insurers.
Knock for knock means
that, after a collision, each insurer pays for repairs to its own
policyholder's vehicle, regardless of who was at fault. It is only
applicable if the vehicles are covered for own damage.
TERMINATES KNOCK-FOR-KNOCK AGREEMENT
has terminated its participation in the Knock-for-Knock Agreement
with effect from 1 October 2005.
The Knock-for-Knock Agreement is an industry agreement in
terms of which participating insurance companies agree to carry
their own loss irrespective of fault. The insurer of the party at
fault pays the excess of the innocent party Theuns Kotzé, head:
Specialist Claims at Santam, says:
increased emphasis on profitability and cost containment, the
debate regarding the excess has become fiercer and has often
frustrated policyholders. “As
a result, policyholders were often left to their own devices when
it came to recovering the excess. Following the termination,
Santam will now be able to help policyholders recover their
excess, whatever it takes.”
Says Kotzé, “Santam’s decision was based on the fact
that the Knock-for-Knock Agreement is outdated and did not stay
abreast of developments in the insurance industry.
Our view is that Santam can serve its clients better
without this agreement. “In addition, Santam has decided to
extend its service by refunding the excess immediately, subject to
certain conditions,” says Kotzé.
Santam will repay the excess under the following
circumstances and if all are present:
continues, “In order to protect their no-claim bonus, Santam
policyholders can claim damages directly from the guilty third
party without lodging a claim with the company. Santam Legal
branches will give policyholders advice on how to claim from the
The third party involved in the accident is insured.
The third party lodged a claim and Santam receives confirmation of
The merits of the claim favour the insured and the third party
insurers accept liability for the damages.