Why you could still be paying for accidents that aren’t your fault

It’s always upsetting being involved in a motor vehicle accident, particularly when it isn’t your fault. If you’ve got insurance cover it will usually cover most of the claims, provided you’ve been driving lawfully and not under the influence. But did you know that your insurer (or you, if you are not insured) can also be liable for the claim even if the accident is not your fault and the other driver claims full liability?

Justmoney talks to the resident insurance expert and manager, Santie Stevens, at Insurance Busters for an explanation of this rule where liability is ‘shared’, and both parties can end up paying toward the damages caused by a motor accident.

Insurers nowadays refer to an ‘80/20’ rule which results in one party paying 80% of the claim, while another pays 20%. How is it that both parties have to pay, even when one may not be at fault?

This may not be 80 / 20 as each incident is handled on a case to case basis. For example, when someone jumps a red robot and causes an accident with someone for whom the robot was green, each party may be held liable for the accident and will therefore be responsible to repair their own damage. This is referred to as the 50 / 50 rule. The reason for this is that the road rules clearly stipulates that when approaching a robot you need to be aware of the surroundings. At all times you need to be focused and do everything to avoid an accident.

Another example may be where you have to keep a two and half second distance from the vehicle in front of you to ensure that you have enough time to stop, should the vehicle in front of you suddenly come to a stop and you drive into the back of such a vehicle, the person normally driving into the back of another vehicle are also at fault. But if the circumstances are investigated the person who just stopped unexpectedly may be held liable for the damages of both vehicles.

However after an accident has been investigated by insurance companies, they will apply the percent their client is liable for and the percentage the other party is liable for. Therefore this rule could be anything from 60/40 or 30/70 etc.  

How do insurers work this out?

Insurance companies investigate each accident and all factors are taken into consideration to establish who was at fault. The result could be that no one was at fault and it was just that – an accident.
Unfortunately most accidents on our roads are caused by drivers not concentrating on the road and not abiding by the road rules that will reduce or avoid accidents. However, when claiming from an insurance policy, subject to one being in place at the time of the accident, investigations are done by experts that are used by insurance companies. Most cases reveal that both parties were at fault.

Will you always have to pay out even if the accident is not your fault and the person that hits you admits complete liability?

The terms of an insurance contract that is agreed upon between the client and the insurance company clearly stipulate that even if you think you are guilty you may not admit any liability. You are ‘innocent until proven guilty’. It does happen from time to time that people think they caused the accident, but once investigations have been done, the evidence proves otherwise.

So what should you do after an accident?
After any accident, the rules are to provide all your details to the other party and take down all details of the other party. Take photos of the scene. Take down the details of any witnesses, etc. anything that will assist the insurers to identify who the guilty party is. Report the incident to the police. Phone your road side assistance number to remove your vehicle if need be. Contact your insurer or broker as soon as possible to report the accident.

What if you don’t want to claim from your insurer but claim directly from their insurer because you are convinced you did no wrong?

If you believe that you are innocent and want to keep the other party fully liable, you can proceed and claim directly from the third party’s insurance policy. Should you choose to go this route and not claim directly from your own insurance policy, as you may not want to lose your No Claim Bonus (NCB) discount, it must be understood that this can take anything from three months to three years before the issue is resolve and the outcome after investigation may be that both parties were guilty, resulting that each are liable for their own damage.

If neither of the parties have any insurance cover in place, an agreement needs to be reach between the parties who will be liable for the damage. This normally ends up in court and again can be a very lengthy process. It may be that the guilty party have no money to pay for the repairs.

The best and fastest way, irrespective who caused the accident and who did not, is to claim directly from your insurance company. Get your car repaired and then let your insurance company’s legal department battle out with the other party’s insurance and to what percentage is your part and what percentage the other insurer has to pay.

If the insurance company can make a recovery from the third party, which in our country is very difficult due to the fact that 70% of vehicle on our roads are uninsured and most of these drivers cannot pay for damages caused to another property even if they are found 100% guilty, you will normally, if they were successful in the recovery, pay your excess back to you.

If a recovery has been done, most insurers will adjust your no claims bonus back to what it was prior to the accident and you will continue to pay a discounted rate as it has been proven that you were not at fault and cannot be held liable.

Unfortunately the success rate in South Africa is very low due to uninsured vehicles on our road and people do not have money, even if found guilty to pay for the repairs they are legally liable for.

What happens if someone hits into your stationary vehicle (parked legally) – will your insurer still have to pay?

Yes, as long as you have comprehensive insurance cover into place. If the person who drove into your parked vehicle drives off without leaving their details, you will be able to claim, but the insurer will have no opportunity to do a recovery from the guilty party.

Do you think the industry will maintain this rule or ever revise it?

In the past the insurers had a knock for knock for rule. This meant that each party had to pay their own damages. However, due to the high uninsured vehicles on our road, this rule does not apply as much. Insurance companies will always do everything they can to do a recovery from the guilty party once it has been proven who was at fault, even if the evidence reflects that the third party was 80% at fault and their client 20% at fault.

Should people ditch their motor insurance cover if they are always going to be held responsible for any accident in some way regardless of fault?

My advice to anyone who owns a vehicle and uses the South African roads is to have some kind of cover in place, irrespective if you are the cause of the accident or not. Most insurance companies will give discounts on your monthly rate for uninterrupted comprehensive vehicle insurance and no claims being submitted against your insurance policy. Remember, it is known as a no claim bonus and not as no blame bonus.

Insurance cover is sharing your risk with an insurer of your choice at an agreed rate that is based on your unique risk profile. This gives you peace of mind should an unforeseen event take place, such as an accident.

The main reason for accidents on our South African roads is due to people not following the road rules, being selfish and not taking other road users into consideration, texting and driving and therefore not concentrating on the road, not having a licence to drive a vehicle and drinking and driving.