Knock For Knock Explained

[Mossycat]

In a lot of threads posted here I keep seeing people using the term knock for knock, a lot of people quote it after an accident but few people realise the true meaning of it, to avoid confusion here is what knock for knock actually means.........

 

 

Knock for Knock is an agreement between certain Insurance Companies NOT to recover their outlay, it in NO WAY reflects liability.

 

Let me explain.......

 

In any given year there will be a number of accidents between people insured with Insurance Company A and people Insured with Insurance Company B. Sometimes it will be the fault of Company A so Company B will write to Company A and ask for their money back, other times it will be the fault of Company B and Company A will write asking for their money back.

 

Insurance Companies realised that they spend a lot of time and money writing to ask for money back whilst at the same time they spend a lot of money sending money out to other Insurance Companies so they started keeping records to see how much money in any given year they paid out to Company X and how much money they received back from Company X. If the two amounts are fairly close then they set up a knock for knock agreement, which means that each Insurance Company pays for the repairs to their own Insured's car (providing they are fully comprehensive policies) and neither Insurance Company pursue the other for the cost of repairs to their own policyholder's vehicle.

 

Knock for Knock exists simply to save the Insurance Company time and money, under a knock for knock claim the policyholder who was not responsibile still pursues the other party for their unisured losses and if successful will not lose their no claims discount.

 

Knock for knock does NOT exist between all Insurance Companies, only those whose records show that they pay out roughly the same as they get back from.

 

The only reason Knock for Knock exists is to save Insurance Companies time and money sending/claiming money back from other Insurance Companies, it has nothing to do with liability.

 

Mossycat

Edited September 15, 2008 by Mossycat

[Bernie_the_Bolt]

Correct, insurers would also argue that it means they can pass the savings on in lower premiums and therefore be more competitive.

 

The evidence to support this is less than compelling.

[gyzmo]

Can this be made s sticky?

[Trojan1401]

Guys,

 

It's a while since I was involved in personal lines motor however, I was under the impression that KK agreements were a thing of the past and that insurers will seek to recover outlay irrespective.

 

Mind you, times do change and if this has been reintroduced, is it because many of the personal lines insurers are now "related" i.e. same common "active" underwriting company but trade under different names - RBS = Direct Line = Churchill = Privelidge etc all underwritten by UKI.

[gyzmo]

Its the RBS group - and there's lots of them. Insurers used to do as you say - in fact DL was infamous for it. However doing that now is frowned upon. what Mossycat said is correct and mods should make it a sticky

[Gryff]

ar Accident - Do's and Don'ts I appreciate this is an oldie but the misconceptions regarding K4K are confusing below is a copy of the post I placed and is to this day how I work. Maybe my 10 years experience is wrong.

 

Hi

 

For my two penneth worth.

 

I work in Personal Injury Claims and knock for knock (K4K) is when an insurance company (lets take Norwich Union(NU)). Say your insured with NU and hit a car insured with Norwich Union Direct (NUD) when the vehicles are repaired both claims departments agree K4K so norwich union doesn't write itself a chq, as both companies are under the same umberella parent company, soon to be AViVA.

 

Between different insurance companies if NU driver hits Esure driver for instance then they agree to pay according to Reduction In Paper Evidence (RIPE) agreement. This is where some insurance companies have agreed that rather submitting evidence ie Engineer reports and invoices they just state what their outlay has been and agree to pay on an honesty basis.

 

Hope it helps and adds to the excellent advice above.

 

Also if you think an accident is contrived or staged please advise your insurance company, the police and the Insurance Fraud Bureau - Contact Us - Insurance Fraud Bureau - 0870 850