knock for knock

Question 1

what is claim settling agreements

Answer 1

internal (or ‘market’0 agreements between insurers that are designed to minimise such conflicts

• generally take the form of agreements between insurers to settle or share certain claims

Question 2

Knock for knock…

simplify and …

Answer 2

expedite the claim process particularly in cases where the fault may be difficult to establish

Question 3

example of when knock for knock can be used?

Answer 3

if two drivers collide at an intersection, each drivers insurer would pay for the damage to their own policyholders vehicle rather than one insurer paying for both.

Question 4

if A refuses to make a claim on under his policy and insists on pursuing a third party claim against B which insurers are likely to settle what happens

Answer 4

B’s insurers will be able to recover from A’s insurer the amount that A would have been able to claim under his own policy, so that the ultimate financial position remains the same.

Question 5

knock for knock agreements operate only in respect of claims damage to vehicles

Answer 5

injury during collison any entitlement to compensation will still depend on being able to establish fault

Question 6

distortions can arise as a result of imbalances between the motor portfolios of different insurers

Answer 6

An insurer with a relatively high proportion of comprehensive policy - policy that provide full compensation will fare less well than most other insurers and a company with relatively high proportion of third party insurances will fare better.

Question 7

third part sharing

Answer 7

will often apply when a third party such as passenger or pedestrian is injured in a collision between two vehicles insured by different companies

Question 8

purpose of third party sharing

Answer 8

the objective is to avoid dispute between the insurers as to the relative blameworthiness of their clients.

Question 9

A ceiling applies to which type of claim agreements

Answer 9

third party sharing

Question 10

A ceiling amount in the UK how much at this present time

Answer 10

£25,000

Question 11

What happens when the claim is larger than the ceiling

Answer 11

the insurers are not bound by sharing agreement. each insurer is then liable for a contribution corresponding to the degree of blame attaching to its insured client

Question 12

third party sharing - if the whole blame rest with one driver what happens?

Answer 12

the driver will be liable for the full loss and the other pays nothing =