A client asked: "I would like to request your assistance regarding how third-party insurance works. My neighbour's car reversed into my parked car in the complex parking lot, causing damage. There was no driver inside my car at the time, and he has admitted fault. I don’t have insurance, but he does, and I am claiming through his insurance. What should I expect in terms of repair costs? What does the law say if they are not willing to pay the full amount for the damage?"
In South African law, third-party
insurance, also known as liability insurance, is designed to cover the damages
or losses that a third party (you, in this case) suffers as a result of the
insured person's (your neighbour's) actions. Since your neighbour has admitted
fault, their insurance company should theoretically cover the costs of the
repairs to your vehicle.
What to Expect in Terms of Car
Repairs Costs
- Assessment of Damages: The insurance company
will typically send an assessor to evaluate the damage to your car. They
will determine the cost of repairs based on the assessment. The insurance
company may also ask you to obtain a quote from a panel beater or a repair
shop that they approve of.
- Settlement Offer: Based on the assessment,
the insurer will make an offer to cover the repair costs. This amount
should ideally cover the full cost of repairs to restore your vehicle to
its condition before the accident.
- Excess Payment: While this is more relevant
to the policyholder, the insurance company might have an
"excess" clause in their policy. This is a predetermined amount
that the policyholder (your neighbour) must pay out of pocket before the
insurance covers the remaining costs. You should not be responsible for
this excess, as you are the third party.
If the Insurance Company Is
Not Willing to Pay the Full Amount
If the insurance company offers
to pay less than the full cost of the repairs, you have a few options:
- Negotiation: You can try to negotiate with
the insurance company to cover the full amount. Provide them with any
additional quotes or evidence that supports your claim that the full
amount should be covered.
- Demand Letter: If negotiations fail, you may
consider sending a demand letter to the insurance company, formally
requesting them to pay the full amount. This letter should detail the
incident, the damages, and the amount you're claiming, and it should
assert your legal rights.
- Legal Action: If the insurer still refuses
to pay the full amount, you can take legal action. In South Africa, you
can file a claim in the Small Claims Court for amounts up to R20,000
without the need for a lawyer. For larger amounts, you may need to take
the matter to the Magistrate's Court or the High Court, depending on the
claim's value.
- Ombudsman for Short-Term Insurance: Before
taking legal action, consider lodging a complaint with the Ombudsman for
Short-Term Insurance. This body can mediate disputes between consumers and
insurers at no cost. The Ombudsman's decision is not binding, but it can
put pressure on the insurance company to settle.
Legal Considerations
- Negligence and Liability: Since your
neighbour admitted fault, the legal principle of negligence applies. Under
South African law, the person who causes damage due to their negligence is
liable for the full extent of the damages.
- Duty to Mitigate: You also have a duty to
mitigate your losses. This means you should take reasonable steps to avoid
unnecessary expenses or further damage after the incident.
If the insurance company is
uncooperative, consulting with a legal professional might be a good step to
ensure you receive fair compensation for your damages.
