THE rule on the road is that whoever causes an accident is liable for all resultant damages or injuries and is usually charged for either the offense of causing an accident by careless or dangerous driving.
Matters are simplified if both of these parties possess the minimal insurance called third party which covers loss or damage to the other party occasioned by the insured.
Insurers of the insured will pick up the claim by compensating the Third Party (TP).
The insured is required to simply notify his insurer, complete the claim form and submit a copy of the driver’s licence.
After this the insurer will then process the claim of the third party which is the reason for this type of insurance.
The insured will further be required to pay the excess which is an insured loss.
Imagine the hassle of looking for funds to meet such liabilities without an insurance policy in place.
Third Party for example costs about K522 per year yet the policy will pay up to K30, 000 in an event of a loss.
Under the given example if the insured has a comprehensive policy then he will also log in a claim for the own damage loss and the insurer will process both claims.
What if the negligent party has no insurance?
Well despite the minimum insurance being mandatory there are still some people that get away with it.
They still manage to get road tax even though insurance is a prerequisite for the same.
With or without insurance, liability still falls on the negligent party.
This is why if the loss is more than the third party property damage limit the insured will still have to bear the difference from their own resources.
By way of an example, if someone with standard third party insurance negligently causes damage to another party and the damages go to K50, 000, the insurer will pay the K30, 000 while the insured will have to pay the K20, 000 differences.
If the affected party has comprehensive insurance, they may opt to claim on their policy and let the insurer recover the loss through a principle known as subrogation.
Simply put subrogation empowers the insurer to step into the shoes of the insured to recover what they paid.
They may amicably enter into an agreement with the negligent party or recover through litigation.
As soon as the accident occurs, it is important to reiterate the need for the insured to bind the third party.
There is actually a Third Party Recovery clause which states that ‘in the event of a collision, when the driver of the Third Party vehicle is found at fault, the insured will take reasonable steps to bind the
Third Party vehicle’s driver, owner and its insurance company to meet the cost of repairs and other claims before repairs to the insured’s
vehicle are authorised.’
This clause is aimed at ensuring the responsible party bears the cost and if insured then their insurance company should meet the costs involved.
In the application of this clause some clients with comprehensive insurance find it difficult to insist on the negligent party to pay the costs.
‘What is the purpose of having comprehensive insurance?’ they ask!
They have a point on
the right to claim on their policy and leave the recovery hassles to their insurer provided they take reasonable steps to bind the TP except the question is on what is considered to be reasonable steps?
Acquiring correct contact details of the third party is the first reasonable step.
If the TP has valid insurance then things are simplified.
At this stage the insured may consult their insurer for expert advice on the validity of insurance.
There are times when a certificate of insurance is produced but premiums have not been paid for example, then the insurer of the TP won’t pay the claim.
Where the TP has no insurance caution must be taken because it may be very difficult for the insurers to trace such a person.
Again the insurer needs to be contacted as soon as possible to intervene in the matter.
Let me conclude by highlighting the two benefits of implementing the Third Party Recovery clause.
The first benefit is that the insured does not lose their No Claims Discount and secondly they will not have to pay the excess unlike claiming from their policy.
Above all they will keep their good claims record which has its own benefits.
Comments: webster@picz.co.zm or webster_tj@hotmail.com or on facebook
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The Author is a Chartered Insurer with
more than ten years
industry
experience