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Did You Know About The Knock-for-Knock Agreement In Motor Insurance?

In India, there are two types of coverage for motor insurance: own damage coverage and third-party liability coverage.

As an example, the Own Damage component will assist you if your vehicle (a car or a bike) suffers any damages as a result of collisions, fires, natural or man-made disasters, theft, or complete loss. *

On the other hand, if you wish to drive or ride in a vehicle in India, you must have third-party insurance. If your insured car injures a third person or damages their property, third-liability insurance will pay for the damages. *

Liabilities here can fall under one of two categories:

  • Damage to third-party property (including a vehicle): In these situations, the maximum claim payout is Rs. 7.5 lakh.
  • There is no maximum award for claims involving injuries to third parties or fatalities; instead, the Motor Accident Claim Tribunal (MACT) decides each claim individually.

Typically, the motorist who is at fault in an accident must pay for the cost of repairs if your automobile is damaged without your fault and you have third-party insurance. But determining who was at fault can be challenging. Also, you must submit a First Information Report (FIR) to the police and demonstrate in court that the other party is at fault in order to be eligible for third-party insurance. *

These court cases may end up being expensive, time-consuming, and tiresome. As a result, few people file claims with third-party insurance plans. The Knock for Knock Agreement enters the picture at this point. Let’s examine this agreement’s significance in greater depth.

What does the term “Knock for Knock” mean in terms of auto insurance?

Insurance providers are aware of how laborious and drawn-out the process of settling third-party claims can be. As a result, insurers sign the Knock for Knock contract. The Knock for Knock is a form of agreement between motor insurance companies when they consent to pay for the repairs to the vehicle owned by one of their customers rather than placing the blame on the driver of the other vehicle. The claim will be filed in this instance against the Own Damage portion of the policy rather than the Third-party Liability portion. *

Theoretically, if your car is destroyed due to someone else’s negligence, Third-party Liability Insurance will assist you in recovering the repair costs. In this case, the at-fault driver’s insurance provider will pay for your damages under the other driver’s Third-party Liability component. *

However, as was already indicated, you must demonstrate that the other driver’s negligence was to blame for the collision. And the only place you can establish it is in court, more specifically before The Motor Accident Claims Tribunal. Motor vehicle accident victims may pursue a claim for compensation in this civil court. Nevertheless, pursuing such matters costs a lot of time and money (legal fees). So, it seems more sensible to choose the insurance firms’ Knock for Knock arrangement. *

Contract of Knock for Knock Within India

The General Insurance Council drafted the Knock for Knock agreement (constituted by the IRDAI in the year 2001). It speaks for allcashless car insurance providers in India. Insurance companies are not required to sign the Knock for Knock agreement. Yet, by way of this arrangement, they can prevent a backlog of Third-party motor insurance claim processes from building up and being taken to court. By approving this agreement, disputes can be resolved more quickly and for less money. * #

Advantages of a knock-for-knock deal

  • Recover costs incurred for damage repair as soon as possible.
  • Avoid unwelcome delays that may occur while bringing third-party claims before the court.
  • This agreement offers greater convenience because the third-party claim procedure is time-consuming.
  • Saves the insurers money, time, and effort. ##

* Standard T&C Apply

# Visit the official website of IRDAI for further details.

## All savings are provided by the insurer as per the IRDAI-approved insurance plan. Standard T&C apply 

Insurance is the subject matter of solicitation. For more details on benefits, exclusions, limitations, terms, and conditions, please read the sales brochure/policy wording carefully before concluding a sale.