The Law Handbook 2024

Chapter 10.5: Motor vehicle accidents and insurance 967 repair cost from the other driver. This is because, if you are found even slightly to blame for the accident, your share of the other driver’s repair costs may exceed the amount that the other driver is ordered to pay you. For example, the cost of repairing your vehicle is $800 and the cost of repairing the other person’s vehicle is $3000. If a magistrate finds that the other person is 80 per cent to blame for the crash and you are 20 per cent to blame, the result is: 80% of your claim: $640 Your legal costs: $1200 Total: $1840 20% of other driver’s claim: $600 Other driver’s legal costs: $1200 Total: $1800 Net payment to you: $40 Therefore, in these circumstances, it is more cost effective to make a claim through your insurance company. What to do when you have third-party property insurance If you have third-party property insurance and you are wondering what to do about your damaged vehicle, you should consider the seven bullet points listed above (under ‘What to do when you have comprehensive insurance’), except for ‘How much is your no-claim discount?’ as this kind of discount does not generally apply to third-party property insurance, although you can check this with your insurance company. The main difference between third-party property insurance and comprehensive insurance is that you are only partly insured with third-party property insurance. Therefore, you can make a claim through your insurance company and also sue the other driver to recover the cost of repairing your vehicle. Another difference is that, if the matter goes to court, third-party property insurance covers you for the amount that a magistrate awards against you (e.g. if a magistrate decides that you need to pay $800 to the other driver, your insurer will pay this cost). Therefore, any amount that you receive from the other driver will not be reduced by the amount that you are ordered to pay them. For example, if the other driver is ordered to pay you $500 and you are ordered to pay them $200, you receive the full $500, as your insurance company pays the $200 owing to the other driver. However, you must be wary of suing another driver, because often an insurance company will not pay legal costs if they think a case is hopeless. That is, they will pay for the damage to the other driver’s vehicle to be repaired, but if you sue the other driver to recover the cost of repairing your vehicle, the insurance company will not pay your legal costs and this legal action will be at your own risk. If you are unsuccessful in court, not only will you not recover the cost of the repairs to your vehicle, but you will also be left to pay your own and the other driver’s legal costs. In all such cases, before commencing legal proceedings, first notify your insurer in writing and find out what they think of you suing the other driver. Often, if there is a large claim against you, your insurance company will encourage you to claim your damages against the other driver. This is good for you, because you can ‘piggyback’ on the insurance company’s claim and any money recovered in your counter-claim will be awarded to you. What to do if you are uninsured If you are uninsured, you have two choices: 1 You can sue the other driver (including settling out of court, see ‘Settling out of court’, below); or 2 You can pay the cost of repairing your vehicle yourself. In deciding what to do, you should consider the other driver’s financial position, legal costs, whose fault the accident was, and the amount of damage to each vehicle (all these issues have been discussed above). If, after considering these matters, you wish to sue the other driver, it is advisable to act as soon as possible. Note that you must sue the other driver for property damage within six years from the date of the accident. What to do if the other driver is uninsured In certain situations, third-party property insurance provides the same cover as comprehensive insurance. For example, provided that the other driver was at