Knock For Knock Agreement

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Knock For Knock

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.

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Santam 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:

“With 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  Says Kotzé, “Santam’s decision was based on the fact that the Knock-for-Knock Agreement is outdated and did not stay abreast of developments in the insurance industry.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:
  • The third party involved in the accident is insured.
  • The third party lodged a claim and Santam receives confirmation of cover.
  • The merits of the claim favour the insured and the third party insurers accept liability for the damages.
Kotzé 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 third party.”