Did You Know? Knock for Knock Agreement

Have you ever heard “Knock for Knock Agreement”? Particularly for Motor Vehicle insurance policies Knock for Knock Agreement is a clause or provision usually applied to a motor vehicle insurance policy, which is helpful once the claim occurs. 

This agreement is a deal among insurance companies to define each customer, not to subrogate each other once an accident occur, since each insurance company would cover its loss of the customer.

Knock for Knock Agreement (KFK) is a deal between an insurance company, member of AAUI, or motor vehicle line business that does not use its subrogation to another insurer in an accident between vehicles (object of insured), in another word insurer would cover its own insured’s loss without offering any demand each other.  

Here is an example: when you hit another car accidentally and both of you have your motor vehicle insurance, so each loss of these two vehicles would be covered by its insurance.

But please notice that there are some requirements of Knock for Knock Agreement (KFK) as follows:

KFK agreement is only able to apply if each insurance policy is on comprehensive plus TPL condition. And it won’t be able to apply to:

• Comprehensive but without Third party Liability 
• Comprehensive but without Third party Liability 
• Third party liability only 

The Insurance company from the impactor party has a responsibility to pay indemnity to its own costumer and also indemnify some points as follows:

• Victim’s own risk (OR)
• Indemnity of loss, damage or and expense uncovered by insurance, such as accessories, medical expense, body injury, and mortality
• Under insurance condition

If you got an accident that involved third party, and you require any assistance to solve it, feel free to call us at 1500674 (MSI). It’s a pleasure to assist you.