Imagine you get into an accident where another driver causes damages to you. To receive compensation for these damages, you would first need to take this issue to the Motor Accident Claims Tribunal and establish that the third–party caused the accident. This process can be pretty cumbersome, time–consuming, and expensive. A quicker solution would be the knock for knock agreement in motor insurance. To help you get a clearer understanding, here is everything you need to know about the knock for knock agreement.
Knock for knock agreement meaning
The General Insurance Council introduced the knock for knock agreement to reduce the hassles that are sometimes involved in third–party insurance claims. The knock for knock agreement is an agreement between insurers through which they agree to pay for the damages of their respective customers if both parties have an own–damage cover. Thus, the knock for knock agreement can help you swiftly receive compensation for your losses without having to go through a tedious legal process. It is important to know that you can only raise a claim through the knock for knock agreement if both the parties involved in the accident have a comprehensive vehicle insurance policy.
Let’s look at a quick example: Ajay loses control of his car while reversing and crashes into his neighbour Karthik’s vehicle, causing significant damages. Luckily, Ajay and Karthik have both bought comprehensive car insurance policies from insurance companies that have signed the knock for knock agreement. Hence, they will both receive repairs under the own damages portion of their respective car insurance policies.
Points to consider
The knock for knock agreement can help the insurers to speed up the process of settling third–party insurance claims significantly. Now, that we know what is knock for knock agreement, let’s look at a few crucial features of this facility:
While the maximum compensation for vehicular damages under the third–party insurance cover is capped at Rs 7.5 lakh by the IRDAI, through the knock for knock agreement, you can receive compensation that is equal to the Insured Declared Value (IDV) of your vehicle.
The knock for knock agreement is not mandatory by law. This means that even if you and the third–party have bought insurance policies from insurers who have signed the knock for knock agreement, you can still take the case to court if you wish to do so.
Through the knock for knock agreement, insurance claims are settled under the own damage component of your insurance policy. As a result, you stand to lose your accumulated No Claim Bonus, even if you did not cause the accident.
It is not compulsory for all insurers to sign a knock for knock agreement. Hence, it is better to check with your insurance company about the same before filing an insurance claim.
The knock for knock agreement is one of the best ways to settle third–party claims. It can not only help you save money but also speed up the process of getting your claim approved and sanctioned.
Disclaimer: The above information is indicative in nature. For more details on the risk factor, terms and conditions, please refer to the Sales Brochure and Policy Wordings carefully before concluding a sale.