The question "What is direct settlement of losses?" is usually asked by those who like innovations or those who have already dealt with insurance claims. In this article, KIRINS will tell you what it is, why it is needed and how relevant it is in Ukraine.
Direct settlement of losses in OSAGO
Direct claims settlement is a system in which the insurance company that issued the policy to its client pays compensation for an accident on its own if the client of the insurance company is not to blame for the accident.
To participate in this program, the client does not need to purchase additional insurance contracts; it is enough to have a valid motor third party liability policy from an insurance company that is a member of this system.
Advantages of direct settlement
Every responsible car owner is looking for a reliable company to entrust with their car insurance. They usually check the rating of insurance companies, reviews, payout rates, etc. And after a long time of choosing an insurance company, the car owner is sure that his funds will be protected in the event of an accident through his fault. But what if this person becomes a victim in an accident? This is where the benefits of the direct settlement system for compulsory motor vehicle insurance can be understood.
If the client of the insurance company is not to blame for the accident, he or she goes to his or her insurance company, where he or she took out a policy instead of the culprit's insurance company, for payment. And the insurance company, in turn, independently receives funds from the culprit's insurance company.
This system allows responsible drivers to choose a reliable insurance company to apply to. But any system has its own nuances, and we'll talk about them below.
Terms of direct settlement
Unfortunately, even if you have a policy with an insurance company that is a member of this system, you still need to be aware of the conditions. Namely, in which case this system works:
An accident involving only two vehicles, regardless of whether there are victims
Both cars have a valid insurance policy
The insurance companies of both cars are participants in the direct settlement. List of all insurance companies participating in the system: https://mtsbu.ua/ua/for_consumers/119428/
The drivers must decide who is to blame for the accident. That is, there is only one 100% culprit
If all of the above rules are met, you still need to keep in mind other important nuances of direct settlement. Let's take a closer look at the most important ones:
Damage to property. Please note that in a direct settlement, you will only be paid for property damage
Damage to health. If there are victims of an accident, you should only contact the insurance company of the culprit
Fixing the accident. An accident can be recorded by the police or by a drawn up European protocol
Franchise. The terms of the franchise are fixed as those specified in the insurance policy of the culprit. This means that your insurance company will pay except for this franchise
Contacting the insurance company
If the victim has applied to "his" insurance company, he also has the right to apply to the culprit's company
If the victim applies to the insurance company of the perpetrator, he/she loses the right to apply to his/her own insurance company
This system has European roots and has the right idea, but there is always a "but". In fact, not always all the conditions of the direct settlement system are met and the victim still has to apply to the insurance company of the perpetrator.
It is up to you to decide whether you want to potentially use this system or not. But remember, if you have chosen a reliable insurance company in which you are confident in all respects and it is not a participant in the direct settlement, then feel free to buy a policy from such a company, because it is primarily the safety of your own funds.