You may overhear people talking about accidents they have had with the outcome being described as a “knock for knock”.
The inference is that liability, and therefore blame, is shared. This is not the case.
A knock for knock agreement is an administrative, cost efficient manoeuvre used by insurance companies.
It is quite simply an agreement between the 2 insurance companies whereby after an accident, each insurer pays for the repairs to its own policyholder’s vehicle. Fault does not come into it, it doesn’t matter who was to blame and only really works effectively for the policyholder if they were insured on a comprehensive basis.
This sort of arrangement is not unique to car insurance companies; it is also used in the marine insurance industry to a certain extent.
While an insurer may be able to pursue a recovery from the party responsible for an accident from his insurer, this is a costly administrative procedure. The Knock for Knock Agreement simplified recovery of claims between insurers with the cost being seen to balance out over a period of time.
About 10 – 15 years ago, some insurance companies with such agreements in place, started to strategically move their principal customer base away from Comprehensive to Third Party Fire and Theft (TPFT).
These TPFT based insurers found themselves with a distinct advantage over their comprehensive based insurance competitors, as they of course, didn’t have to pay for their customers’ repairs.
It wasn’t that long before the Comprehensive based insurers cottoned on to this and withdrew their knock for knock agreement with the relevant TPFT based insurer.
It is therefore likely there are fewer of these types of arrangements in place in the modern business world as there used to be.