Due to the growing number of road accidents and ordinary collisions, in today's article we will discuss the rules regarding the payment of compensation from the third party liability insurance of the perpetrator of the damage in the event of partial damage to the vehicle.
Principle of full compensation
First, it should be noted that partial damage is considered a situation where the cost of repairing a car does not exceed the market value of the vehicle. According to the applicable principle of full compensation, the compensation received by the injured party from the perpetrator's third-party liability insurance should correspond to the total amount of the damage, i.e., the cost of restoring the injured party's vehicle to its pre-damage condition. Damage to the vehicle occurs at the time of the accident, therefore, the injured party is not obligated to repair the vehicle in order to receive the compensation due. The injured party has the right to choose the method of compensation. The insurer's conditional payment of compensation on proof of repair completion and proof of costs incurred is not supported by applicable regulations and the established case law of common courts and the Supreme Court. However, it should be remembered that the compensation obtained cannot constitute a source of unjust enrichment (therefore, the injured party should receive the precisely estimated value of the damage and nothing more).
Obligations of the insurer
Any damage should be reported directly to the insurer of the person who caused the damage, making it easier for victims to pursue the compensation they are entitled to. The insurer is responsible for conducting the entire compensation payment process. According to applicable regulations, the insurer has 30 days to complete the settlement process. Extensions of this deadline can only be granted in exceptional cases, and the insurer must prove that, despite due diligence, it was impossible to clarify all the circumstances that would allow for compensation payment within 30 days.
Amount of compensation
The compensation due to the injured party may be determined based on a cost estimate prepared by an expert (the so-called cost estimate method) or on the actual cost of the repair. The compensation paid by the insurer must restore the injured party's vehicle to its pre-damage condition, both aesthetically and technically. According to established case law, injured parties have the right to use new and original parts (if any) for the repair.
To sum up, the injured party, under the third-party liability insurance of the owner of a motor vehicle, in the event of partial damage, may demand compensation in the amount corresponding to the necessary and economically justified costs of restoring the vehicle to its pre-damage condition, even if he did not carry out the repair and sold the vehicle in a damaged condition.
For more information, please contact us. We will assist you at every stage of the process to obtain the compensation and redress you deserve.
This article is for informational purposes only and does not constitute legal advice.
Legal status as of August 20, 2024
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