Accidents are sometimes unavoidable, even in situations where care is taken. therefore, when a car accident occurs, even if it is a minor incident, it is especially helpful to know the best ways to proceed.
We’ve discussed filing car accident claims before, including how to claim from third-party insurance companies. This article now aims to discuss the option of a private settlement in the event of a car accident. will cover:
- what is a private agreement?
- When is a private auto accident settlement preferred?
- When is it not possible to enter into a private agreement?
- what should you do if you enter into a private agreement?
- What happens if the terms of the agreement are breached?
- death or bodily harm to any person, which may include a non-driving party (such as a pedestrian);
- significant damage to any property, especially if government property was damaged; or
- a hit and run case.
- call an ambulance immediately if there are injured victims;
- report the accident to the police, if necessary;
- exchange information with the parties involved in the accident;
- gather as much evidence of the accident as possible; and
- report the accident to your insurance company.
what is a private agreement?
In car accidents, a private settlement is a resolution of the accident between the parties that does not involve filing a claim with their respective motor vehicle insurers. the private settlement may result in compensation made by the guilty party to the other party.
Parties in a car accident who settle privately will also generally agree not to pursue further legal claims against each other.
however, parties to a private settlement are still required to notify their insurers that a settlement has been reached (the repercussions of not doing so are explained below).
when is it advisable to enter into a private agreement?
If the car accident resulted in minimal or no damage to your vehicle and, more importantly, does not involve bodily harm to any of the parties involved, then it would be wiser for the parties to settle privately.
This is because one of the most important benefits of entering into a private settlement, rather than involving insurers, is to retain your no claims discount (NCD).
ncd is a right given to you, the insured, where if you make no claims under your car insurance policy for a year or more with your current insurer, then you will be awarded a reduced amount for the premium you have to pay for the year following the renewal.
therefore, losing the ent for making an insurance claim automatically increases the cost of subsequent auto insurance premiums.
When is it not possible to enter into a private agreement?
Either party to a car accident cannot resort to a private settlement if the accident involves or has resulted in:
In the above cases, there are several things that need to be done during and after the accident. these include:
then, you can make a claim for compensation for the car accident through the following ways:
- against your insurer in accordance with its claims procedure;
- against the other party (or the party at fault) through its own claim for damages;
- to the auto insurance office, in hit and run cases and you don’t know the details of the other party involved; and
- through fidrec (financial industrial dispute resolution center ltd) in instances of non-injury auto claims under $3000.
what should you do if you enter into a private agreement?
The first step is to have an accurate estimate of the cost of repairing the damage (if any) to your vehicle. To do this, you must take your car to one of your insurer’s authorized workshops to obtain a written estimate of the costs.
This step is especially important because the parties can decide among themselves how much the at-fault party should compensate the other party for damages caused in the accident. this ensures that the value of the agreed compensation remains fair to all parties involved.
You can also use the Singapore Law Academy’s online car accident claims stimulator to find out who may be at fault and get an estimate of the amount of damages a party can claim.
The next step is for both drivers in the accident to fill out and sign a private agreement form or letter. the private settlement form/letter must indicate the following details:
- details of the accident, including the place, date and time of the accident;
- details of the parties involved and their vehicles, including the full names of the drivers, identification numbers and vehicle registration numbers;
- terms of the agreement, which may include:
- a statement that there was no personal injury or death in the accident,
- a statement that the parties agree to resolve the matter amicably;
- the amount to be paid by one party to the other, or if both parties decide to bear their own repair costs;
- a statement that both parties will not make a police report of the accident;
- a statement that neither party will subsequently file a claim for damages based on the accident;
- acknowledgment of receipt of compensation, if any; and
- signatures of the parties entering into the agreement.
- denial of your future insurance claim, in the event that making such a claim is more feasible than a settlement;
- loss of ncd when renewing your policy; or
- the insurer refuses to renew your policy in full.
- the guilty party does not pay the full value of the agreed compensation; or
- either party subsequently files a claim for damages based on the accident outside of the private agreement,
You can check to see if your insurer has sample private settlement forms for you to use.
It should be noted that under the Auto Claims Framework (MCF), any car accident must still be reported to your insurer within 24 hours. this is even if there is no visible damage, and even if you choose to settle claims privately. not doing so may result in:
The completed and signed private settlement form/letter must be sent to your respective insurer. this is done for record purposes, as even with a private settlement, you can never really be sure that the other party will not decide to file a claim against you in the future.
What happens if the terms of the agreement are breached?
A completed and signed private letter/form of agreement is considered a valid and binding legal contract or agreement. as a result, any violation of the terms of the settlement agreement, even if:
You are subject to remedies available under the law for breach of contract, including monetary compensation (also known as damages).
There are several avenues that can be used to resolve a breach of contract, such as court proceedings or arbitration, as well as small claims court if the claim does not exceed $20,000.
Before entering into a private settlement for a car accident, it may also be advisable to obtain legal assistance.
If you are the at-fault party in a car accident, an experienced attorney can help you negotiate a settlement.
on the other hand, if you are a victim of the accident, legal assistance can also help you obtain fair compensation for the damage caused to your vehicle, or for any injury you may have suffered.
In addition, it may be necessary to obtain legal assistance if there is a breach of the private settlement agreement and you intend to hold the other party liable for the breach.
If any of the above situations apply to you, consider consulting one of our experienced attorneys for help.