Accidents happen. The average motorist will be in about four car accidents in the course of a lifetime, according to motor insurance industry experts.
Sometimes we are the cause and sometimes others cause these accidents.
If you were in the driving seat when the accident happened, the first prize is to have comprehensive car insurance in place. However, to save on premiums motorists opt to exclude specific insurable perils.
But unless no-one is driving your vehicle, you should at least have third-party insurance cover. This essential type of cover is usually included automatically as a benefit under your insurance policy and the maximum indemnity limit is clearly specified in your policy schedule. Be sure to check this out!
Why third-party insurance cover?
The costs for which the third party may hold you liable could cripple you financially, depending on the extent of damage and the value of their assets.
Who or what is considered a third party?
A third party is a person who has suffered a physical loss to their property due to your actions and holds you responsible by instituting a claim against you.
A third party is not only a natural person but can also be a business or any other type of entity that owns physical assets and extends to the geographical limits stipulated in your policy (which may be outside of South Africa).
In your insurance policy, there are three parties involved, which is the reason for calling this cover third-party insurance:
- Your insurer
- The third party (person who suffered loss or damage because of your actions)
Third-party insurance does not provide cover for damage to your vehicle or your property, but only for the cost of restoring the damage to the property of the third party who is holding you liable and accountable.
Whose fault is it?
To determine who is at fault can be a tricky process. Sometimes both parties are found to be guilty. Insurers apply the principles of apportionment of negligence.
Claims are determined and paid out proportionately to the fault of parties determined when there is an accident under the Apportionment of Damages Act 34 of 1956 (as amended).
Is personal injury covered under third-party insurance?
Third-party insurance cover excludes personal injury of any person but includes damage to material possessions such as a vehicle or a building.
Any accident occurring within the borders of South Africa, resulting in a claim for compensation of injury of a third party, must be instituted against the Road Accident Fund (RAF).
What to do if you have an accident and a third party is involved
STEP 1: Stop, stay calm and don’t admit to anyone you made a mistake.
STEP 2: Call the relevant emergency service (Ambulance 10177 and/or Police 10111).
STEP 3: Take photos of the scene and damages to the vehicle if possible. Also, take pictures of the license disks of all vehicles involved and driver’s licenses of all drivers involved.
STEP 4: Report the incident to the SAPS within 24 hours.
STEP 5: Complete the accident form provided by your insurer and sketch the accident scene.
STEP 6: Report the claim to your insurer to conduct a full assessment.
Check that all claims (where a third party has been involved) have been reported to your insurer immediately as claims that fall out the policy prescription period will most probably not be entertained.
Remember, another person’s insurer has no obligations towards you!
Any third party may only claim against the responsible party and not against the insurer.
Don’t admit to anyone that you have made a mistake when you are in an accident. Your conduct must not prejudice the rights of insurers or else you may lose your right to claim against insurers.
Your insurer must protect you the best they see fit, even if it means refusing to pay out the third party’s claim if it is in your best interest. It is the only way that possible legal liability against you may be discharged. This duty is to exercise any defence you may have.
Don’t deal with the third party’s insurer if it was your insurer by giving them the full details of an accident or supplying them with a full statement and then wait for your claim payment. Often this can provide the insurer ammunition not to pay your claim. Don’t volunteer any information to the third party’s insurer.
Instruct your insurer or attorney to make a demand for payment of the full amount.
The following factors may influence the possible settlement of a third-party claim:
- Third-party insurance can only be considered if you (the first party) have a motor insurance policy in place that covered you for third-party claims at the time of the incident.
- It is only when an insurer agrees to indemnify you and starts defending you, that engagement between your insurer and the third party takes place.
- Most insurers no longer allow policyholders to negotiate any settlement or communicate with third parties in any way.
- No third party may negotiate, threaten or influence a policyholder to settle all or any part of a claim.
- All communication must be sent directly to your insurer.
- Since your insurer has no contract with the third party, a claim against you (the first party) is strictly a legal claim and case law and legal principles will apply to the merits of your specific accident/claim.
- Negligence is apportioned in accordance with the Apportionment of Damages Act 34 of 1956 (as amended).
- The calculation is determined by reconstructing the accident with some general rules of the road. Any decision reach regarding settlement is based on the merits.
What are the merits of the case?
Merits relating to the circumstances of an accident can be defined as follows:
The ‘how, who, where, why and what’ of the accident and the determination of which party that can be held legally liable for the accident and the extent of their liability.
It is the responsibility of all motorists to avoid any possible accident. Traffic offences, like driving without a license, speeding, parking unlawfully, driving in the yellow line cannot exclude the portion or percentage of negligence attributed to the third party.
- The third party must seek recourse through an available legal channel and institute a claim against you.
- The third party must provide quotations for repairs to your insurer upon which it will be assessed and audited by a qualified motor engineer or assessor.
- The third party must prove the full extent of their loss and provide your insurers or attorneys with all documentation requested to process a claim.
Most settlements get negotiated before implementation. The insurer’s contractual duties are then fulfilled. At the same time, only when achieving full and final settlement of the claim, the rights of the third party against the policyholder ends.
With third-party claims, your insurer is obligated and will only settle your claim to the extent that the third party is holding you liable.
Remember, depending on the amount of your claim, it may not be viable for your insurer to defend your claim.
If the estimated legal costs exceed the amount claimed it may not be worth your while to institute a claim. The small claims court will handle your claim free of charge if the amount of your third-party claim is less than R11 000.
Give your full co-operation
Give your full co-operation to your insurer when they defend you in the unfortunate event of a third-party claim against you.