The ‘knock-for-knock agreement’ will replace the existing system and will be drafted by First National Insurance Public. After the approval is released, the company will edit the agreement, said Maung Maung Thein, noting that the new system is a contract between insurance companies that many other countries use.
“The nature of the contract is that when there is a motor accident, there is no differentiation between who is right and wrong. Each company pays the losses for the vehicle of their clients,” he explained.
“If there is a motor accident between a car insured at Company A and another car insured at Company B, it could be the fault of the driver from the A side. Normally, A would have to pay for the losses. If the driver from the B side is wrong, B would have to pay for the losses to A. However, in the knock-for-knock agreement, each company pays the losses for the cars insured at their companies, no matter who is wrong….They don’t need to pay the losses for the other side.”
The deputy minister added that the insurance company will have to pay the losses for both cars if the cases of accidents between an insured car and an uninsured car in which the driver of the insured car is at fault. However, the driver of the uninsured car will have to pay the losses for both cars if he or she is at fault.
source: Eleven Myanmar
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