In this article, we share the best steps to take when you want to sort out a car accident debt and answer the most frequently asked questions about paying off car accident debt.
Car accidents can be very expensive, especially if you’re at fault and you don’t have insurance. If you’re having issues with a car accident debt, this page explains the steps you should take to resolve it.
If you’ve had a car accident, are at fault, and aren’t insured, the other party’s insurance company may demand payment for their loss – and that could be a lot of money. Insurance companies are obliged to act fairly, and reasonably and also consider repayment arrangements if you’re in financial difficulty.
If you’re worried about what will happen if you don’t pay off the debt, or if you go bankrupt, scroll to the bottom of this page.
If you’ve completed all the steps and your problem still hasn’t been solved, or you’re feeling overwhelmed, call us on 0410125036 to speak to a debt counsellor.
If you’d prefer to chat with a debt counsellor online, you can use our live chat service by clicking the chat icon in the bottom right corner of your screen.
If you have a car accident debt follow these steps.
What are the steps to take to sort out a car accident debt?
Seek legal advice if you’re not sure whether you’re responsible for the car damage
If you’re not sure you’re responsible, don’t admit liability. Get legal advice immediately.
If you have insurance, claim on that insurance
If you have insurance and are not sure whether you can claim just contact your insurer and make a claim.
Get legal advice if you have made a claim and the claim has been rejected.
If you can claim but cannot afford to pay the excess upfront because you are in financial hardship, then you can ask your insurer for an arrangement to repay your excess by installments. You can also ask the insurer to deduct the excess from any payout you receive.
The insurer cannot refuse to process your claim because you failed to pay the excess. If your insurer won’t agree to a reasonable repayment arrangement, then you can make a free complaint with The Ombudsman for Short Term Insurance.
Make sure the amount being claimed is reasonable
If you accept that you’re responsible, you still need to be satisfied that the amount being claimed is reasonable. Ask the insurance company or debt collector for copies of:
- Repair invoices
- Any towing costs (if claimed)
- Detailed invoices for hire car costs (if claimed)
The insurance company isn’t obliged to get more than one quote, let you choose a repairer, or find the lowest quote. The repair costs only need to be reasonable.
If you want to dispute the amount claimed, write to the insurance company or debt collector setting out your reasons. For example, you might dispute a repair of car parts that were not damaged by you.
Only continue to the next steps if you’re satisfied with the amount being claimed from you. Get legal advice if you cannot resolve a dispute on the reasonable repair costs.
Contact the insurance company or debt collector
If you accept responsibility and are satisfied with the amount being claimed, contact the insurance company or debt collector that’s claiming the money from you.
If you can pay or almost pay, you can often negotiate a discount on the amount claimed (called a reduced lump sum settlement). Make sure that if you do negotiate a reduced lump sum settlement, you clearly confirm in writing that the payment is in “full and final settlement”.
If you can’t pay, tell the insurance company or debt collector that you’re in financial hardship. The insurance company and debt collector have obligations under the SAIA – Code of Conduct – South African Insurance Association. Once you ask for financial hardship support the insurance company must put recovery action on hold until your application has been assessed and you have been notified of their decision. You need to be prepared to provide reasonable information and evidence about your financial situation if requested.
Possible arrangements are:
- Delaying the date for when payment must be made
- Paying in installments
- Paying a reduced lump sum amount
- Delaying one or more installment amounts
- A debt write-off (This may only be possible if you can show that you cannot pay the debt in the foreseeable future. Usually, this is because you’re receiving no income, have no significant assets and this situation is unlikely to change.)