More and more often in the insurance field reference is made to direct compensation for risk taking RC Car.
In the field of car insurance, thedirect compensation it was introduced in 2007 with the Bersani Decree. In this case, direct compensation is a tool that allows the person involved in a minor accident to ask for the compensation directly to your own insurance company and not to that of the other party.
If you are evaluating different car insurance quotes to find the best solution for your needs, you have probably noticed that i lower premiums they are most often guaranteed by companies that do not provide direct compensation.
But what exactly is meant by direct compensation and what are the benefits related to this insurance clause? Here’s everything you need to know about direct compensation; when it applies, how to apply and the alternatives for requesting a refund.
Direct car insurance compensation: the complete guide
What is direct insurance compensation and how does it work
Direct car insurance compensation, also known as “direct motor vehicle compensation” or CARD compensation (Agreement between Insurers for Direct Compensation), is a system through which insurance companies manage road accidents.
In the traditional “third party” systemnow defined by convention as indirect compensation, in the event of a road accident the injured party is required to submit a request for compensation to the insurance company of the person who caused the accident: a process that can sometimes be complicated and require long waiting times.
Direct compensation – designed to simplify the procedure – instead allows the parties involved in a road accident to contact their insurance company directly to obtain compensation, regardless of their fault in the accident.
The types of insurance compensation they are therefore distinguished into:
- direct compensation where the injured party is reimbursed by his own insurance;
- indirect compensation when the damaged party requests reimbursement from the opposing company.
How direct insurance compensation works
The direct car insurance compensation process develops in different phases:
- Reporting the accident: after a road accident, each party involved reports the incident to their insurance company to start the direct compensation process;
- Damage assessment: by contacting their insurance company the injured person will obtain an assessment of the damage suffered by the vehicle and by the people involved in the accident. This may involve an inspection of the car and gathering medical information if necessary;
- Direct refund: based on the assessment of the damage and the conditions of the policy, the injured party’s insurance company will guarantee financial compensation to its customer by covering the costs of repairing the car, medical expenses, rental of a replacement vehicle and any other associated damages to the accident;
- Compensation between companies: the insurance company of the injured party and that of the person held responsible for the accident will compensate each other for the compensation paid;
- Lawsuits: If the parties involved do not agree on liability or the amount of compensation, the case may be resolved by taking legal action.
In detail, for damage caused to vehicles or things the insurance lasts up to 60 days from receipt of the application to formulate an offer of compensation, while in the case of personal injury the time limit for direct compensation reaches 90 days.
When direct compensation applies
It is important to note that the direct compensation system is usually limited to situations where only insured vehicles are involved. In the event of an accident involving pedestrians or cyclists, the system may not be applicable and compensation may have to follow a traditional process.
Here are the details in detail necessary requirements in order to access direct compensation:
- the accident must occur on Italian soil;
- the subjects involved must reside in Italy;
- the accident must not have caused serious injuries to people (in particular it is not applicable in the event of death or exceeding 9 points of permanent disability);
- the accident must have been caused by the contact of two vehicles;
- the vehicles involved in the accident cannot be more than 2;
- the vehicles must be motorized, registered and insured in Italy.
According to the rules established by the decree, direct compensation cannot therefore be used for accidents where the injuries suffered by the parties involved are higher than 9% of permanent disability, or in the event that one of the counterparties resides abroad.
When direct compensation cannot be applied
The cases in which a claim cannot be managed through the direct compensation procedure are:
- responsibility of at least two people
- damage to a vehicle without an engine
- involvement of a pedestrian
- presence of injured people who will be recognized as having more than 9% permanent disability
The indirect procedure, i.e. the request for reimbursement to the counterparty company, must be carried out even in cases where a collision between vehicles has not occurred, but can still be carried out in any case, even when it would be possible directly.
If the conditions for direct compensation do not exist, the victim of the accident will have to request compensation from the insurance company of the person who caused the accident. In reality, very little changes for those who need to obtain compensation for the damage since the accident report must still be sent to their insurance company.
The latter will then submit the request for compensation for damages to the insurance company of the person responsible for the accident. The time limits for submitting the compensation proposal are the same as those for direct compensation:
- 30 days: if the CID was used;
- 60 days: if no damage to people but only to property was reported in the accident;
- 90 days: if personal injury was also reported in the accident (in this case, however, there are no limits on injuries).
If the compensation does not satisfy your claims, or if the insurance company refuses to compensate the accident, you can start a judicial proceedings. At this point a judge will establish the need or amount of any compensation.
Compensation for an accident caused by an uninsured person
If the car involved in an accident does not have an insurance policy, it could be very difficult to obtain compensation.
The problem does not arise if your policy is one Kaskosince in this case your insurance company will take care of it direct compensation to reimburse all damages suffered by your vehicle.
Another alternative is one for which there is one in your policy Collision Guaranteewith which you are protected from all damages caused by a collision with another vehicle, even if not insured.
On these two occasions, the victim of an accident receives compensation, through direct compensation, from their insurance company even if the person who caused the accident has not taken out any insurance.
If you are not covered by the Kasko or the Collision Guarantee, you will instead have to contact the Guarantee Fund for road victimswhich compensates for damages caused by uninsured drivers within a maximum of 5 million euros for personal injury and 1 million euros for property damage.
Insurance with indirect compensation obligation: risks and advantages
When evaluating quotes for car liability insurance, very often the most convenient ones include theexclusion of direct compensation. In this case it is advisable thoroughly evaluate the pros and cons of the offer because in the event of an accident in which you are the damaged party it will definitely be easier to get a refund from your insurance rather than sending the request to a third-party company. In addition to the possible bureaucratic delays, you could in fact expose yourself to need to anticipate repair costs of the vehicle or have compensation problems in cases of contributory negligence.
Direct insurance compensation is a system that simplifies the process of handling road accidents, allowing involved parties to obtain compensation through their respective insurance companies. This system aims to reduce waiting times and to simplify the procedures for the management of road accidents, thus contributing to a more efficient risk management related to road traffic.
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