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Not at fault car insurance
Find out how to avoid paying for damage to your car if you are involved in an accident that you did not cause.
In New Zealand, the issue of liability – in other words, whoever caused the accident – is a loaded topic. Collisions result in expenses, and whoever is responsible usually needs to pick up the bill. If you’re involved in a motor vehicle accident, through no fault of your own, and your car is damaged or written off, you have several options of receiving a payout from a car insurance claim.
In which scenarios would I be not at fault?
In the field of car insurance, liability is considered exclusively with respect to motor vehicle accidents. There are plenty of other situations in which your car may be damaged through no fault of your own, ranging from vandalism, to flood or hail. Comprehensive car insurance usually covers damage of this kind, but you may still have to pay any applicable excess.
When two or more cars are involved, the percentage of liability is often shared between the parties. However, there are some situations in which only one driver is likely to be considered entirely at fault.
- Admitting liability at the scene. In the aftermath of an accident, if Driver A says something like “I didn’t see you” or even apologises to Driver B in the presence of witnesses, courts frequently consider this to be an admission of liability and Driver A is automatically found at fault.
- If one driver is intoxicated. The fault is typically assigned to a driver who is under the influence of alcohol or drugs if the other driver is not intoxicated in any way.
- Being rear-ended by another driver. If someone runs into the back of your car, they are almost always considered at fault.
- Failing to obey a “give way” or “stop” sign. If it is proven that the other driver was unable to give way to you and you were driving legally, they are usually found at fault unless there was any action you could have taken to prevent the accident (such as swerving or applying the brakes).
- Running a red light. If another driver collides with you as a result of failing to obey a traffic signal, they are also found at fault in most cases. Again, if you had the option of trying to prevent the accident, but failed to do so, you may be liable for contributing to the accident due to negligence.
I have no car insurance and someone hit me. What are my rights?
Even if you don’t have insurance, you are entitled to compensation if the other driver was clearly at fault. You can send them a letter of demand with independent estimates for repairs and damage to your vehicle or property.
In this situation, the other party has a couple of options:
- Go through their insurance. If they’re insured, they can choose to make a claim from their insurer to cover what they owe you.
- Not through insurance. On the other hand, they may choose not to, instead deciding to pay you with their own money.
What if the other driver refuses to pay?
If you are uninsured and they refuse to pay for whatever reason, you can issue a letter of demand for compensation. If they ignore this, you’ll have to get a lawyer and take them to court.
Alternatively, if the damage or repair bill is small enough, there could be another legal recourse. If the amount you’re seeking is less than $30,000 and the other driver is insured, you can lodge a claim with your local Disputes Tribunal to settle the dispute.
To claim or not to claim?
When thinking about whether or not to claim for an accident in which you’re not at fault, the most relevant factor is whether you can get the other party to pay for the damage. If the liability for the accident can be swiftly and unequivocally determined – and that’s a big “if” – then usually the best course of action is to approach the other driver.
In some cases, for example, if the other party is uninsured and cannot pay for the damage done to your vehicle, it makes sense to claim on your insurance. If the damage to your car is minor and you do not have a reasonable chance of getting the other driver to pay for it, it’s usually not worth making a claim.
If an excess applies to your policy and the cost of repairing the damage is not much more than your excess level, it might not be worth pursuing a claim when you’re unlikely to receive much reimbursement.
Does my level of insurance impact what I can claim?
Comprehensive insurance usually covers you for all types of damage to your vehicle, regardless of whether or not you’re at fault.
If your insurer agrees the accident was entirely the other driver’s fault, you may be entitled to claim under a Third Party policy, or if you have a Third Party Fire and Theft policy. Many insurers stipulate that the other driver must not have insurance that can cover the damage to your vehicle for you to make this type of claim, and the maximum benefit you will receive is usually capped at $2,000 to $4,000. You are generally expected to provide the other driver’s name, address and registration number.
What do I need to make a claim?
- Record the other driver’s details. Your insurer will need their name, address, phone number, and the registration number of the car they were driving.
- Make notes at the scene. Write a summary of what took place as soon as possible after the accident. Accounts that are recorded immediately after an incident are called “contemporaneous evidence” and hold a lot of weight in court.
- Ask witnesses for their contact details. If possible, ask any witnesses present to jot down their description of what happened at the time of the accident.
- Take photos of the scene. Pay particular attention to not only the damage your vehicle sustained but the final resting positions of all the cars involved, any skid marks and damage to surrounding objects such as traffic lights. Add GPS tags to your photos if you have the option.
- Submit footage of the event. If you have a dash cam recording of the accident, this is also valuable for your insurer.
Will a claim affect my premium or no-claims bonus?
In most cases, if your insurer agrees the accident was caused exclusively by the other driver, you will not be penalised, even if you make a claim.
Depending on your level of cover and the specific conditions listed on your certificate of insurance, there may be some circumstances which affect your no-claims discount, even if you have purchased protection against this. Read your product disclosure statement (PDS) and certificate of insurance carefully to avoid any nasty surprises.
Do I go through my insurer or the insurer of the at-fault driver?
If you have comprehensive insurance, your insurance company will repair your car, and then contact the uninsured driver for the cost. You may need to pay an excess, and you might lose your no-claims bonus.
However, many insurers in New Zealand have added an “Uninsured Motorist Extension” (UME) to comprehensive or third party insurance, to ensure insured motorists aren’t penalised. Most insurers’ UME provides cover of approximately $2,000 – $4,000 if you can identify the person responsible for causing the damage to your car.
If you have comprehensive insurance, the only situations when you can approach the other party’s insurer directly is if the other driver has died or cannot be located.
Under virtually all other circumstances, your initial point of contact needs to be the driver who is at fault. If the other driver decides to claim on their insurance, the insurance company will likely contact you to request information and possibly access to your car, so its representatives can make an independent assessment of the damage.
Will my car be repaired or written off?
It is up to your insurer to choose whether your car will be repaired or declared a total loss and that typically comes down to what is the cheaper option.
If there is any question about whether your car can be repaired sufficiently enough to be safe to drive afterwards, you have the right to obtain an independent assessment. If you can provide evidence that your insurer is pressuring you to repair a vehicle that would be more safely written off, you may have the option to open a case with the Insurance and Financial Services Ombudsman (IFSO).
What happens if my car is written off?
There are two main categories under which your vehicle can be written off, and different rules apply for each of them.
- A statutory write-off means your car will never be safe to drive again, no matter how much repair work is done, in which case it cannot be re-registered.
- A repairable write-off means the cost of repairs exceeds the sum insured, and usually, the insurer will keep the vehicle and pay you its agreed or market value.
- You can request your insurer to let you keep a repairable write-off, for example, if it has sentimental value, and pay you the sum insured less any salvage value.
- Not all repairable write-offs can be legally re-registered, so it is an important point to check before applying to keep a severely damaged vehicle.
How to make a claim
If you do plan to lodge a claim with your insurer, requesting a claim form is usually the safest option because you can carefully prepare your answers to all the questions. If your insurer offers the opportunity of processing your claim over the phone, you run the risk of being put on the spot and not answering a question as well as you could have if you’d had the chance to think about it.
- Take your time. Don’t start the claim process while you are still in shock or emotionally upset after the accident.
- Prepare yourself for a phone claim. If you decide to lodge your claim over the phone, think carefully about what you are going to say and keep your descriptions simple, neutral and objective. Remember, the conversation is usually recorded by your insurer and may be referred to later in the process.
- Refer to your notes. Use the summary you wrote down at the time of the accident, to help answer the questions on the claim form or over the phone.
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