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If you were in a car accident and a car was damaged, the driver or owner of that car might make a claim against you if they believe it was your fault. They may send you a letter of demand, phone you, or send you an email or sms. If they are insured, their insurer may contact you.
There are different ways that you can respond to their claim, including writing a response to their letter of demand.
This section covers:
You can respond verbally, but it is a good idea to put it in writing.
For more information, see Responding to a letter of demand – car accidents.
It is best not to ignore a claim that is made against you. If you don't respond, the other party may decide to start a court case against you. This will cost time and money.
You may agree that you were at fault in the accident and that the amount of money they are claiming is reasonable.
Before you agree that you were at fault in the accident, you should contact your insurer.
If you believe that you were not at fault in the car accident, you should tell the other party why you deny their claim.
You can do this by speaking or writing to them. It is a good idea to always be polite and courteous when communicating to the other party.
If you believe you were both partly at-fault, you can negotiate to pay them a reduced amount and also make a claim against them if your car was damaged in the accident. This is called 'contributory negligence'. You should get legal advice about this as it can be complex.
If the other party does not agree with you, they may decide to start a court case against you.
If you don't know whether you were at fault or not, or how they calculated the money they are claiming, you can write back to them to ask for more information. This is known as a 'request for further and better particulars'.
In your letter you should be careful not to admit or deny the claim. You should ask the other party for information and documents that will help you decide whether to admit the claim, such as:
Sample: Request for more information – car accidents
You can contact the other party at any time to try to reach an agreement about the claim.
You can offer to pay a lesser sum or an amount in instalments until the claim is paid.
Negotiating with the other party doesn't need to be formal. You can negotiate with the other party in person, on the phone, or by writing a letter, email or text.
You should not admit fault and write “ without prejudice” on the letter, text or email. This means it can’t be used by the other party as evidence in court. You can speak openly about the matter without the risk of the other party using that information against you later.
For information on how to respond in writing, see
Responding to a letter of demand – car accidents.
If you negotiate verbally, keep notes of any conversations you have with the other party, including dates and times. These may be helpful if you end up going to court.
For more information, see Negotiation.
If you come to an agreement, it is a good idea to put your agreement in writing.
For more information, see Put it in writing.
If you can't reach an agreement with the other party, the other party may decide to start a case in court against you. It is a good idea to try and resolve your dispute with the other party, before going to court.
For more information, see Settling your dispute.
If someone makes a claim against you because they believe you were at-fault in a car accident and you have either third party property or comprehensive car insurance, you will need to decide whether to make a claim on your insurance policy. If you decide to make a claim, your insurance company will handle the claim for you.
If you have comprehensive insurance, your insurer should also cover the cost of repairing the damage to your vehicle and other losses.
Before you decide whether to make a claim on your insurance policy, you should consider whether making the claim will reduce your 'no claim bonus', increase the cost of your premiums or affect your ability to obtain insurance in the future. You may also have to pay an excess.
For more interactive assistance, see the MVA Problem Solver on the Financial Rights Legal Centre website.
If you are the 'at-fault' driver and are charged by the police for being under the influence of drugs or alcohol at the time of the accident, your insurance company may refuse your claim.
If you decide to make a claim on your insurance policy, you should contact your insurer for details on how to make a claim and what other information they need.
For more information, see
It may be a condition of your policy to tell your insurance company if you have been involved in a car accident, even if you decide not to make a claim.
You should not admit to the other driver that you were at fault in the accident if you intend to make a claim on your insurance policy.
Case study - Rob and Mick
Rob parked his car at a shopping centre. After checking his mirrors, Rob slowly reversed out of a parking spot at the shops when he suddenly felt a bump. Rob had run into a car that was behind him. Rob does not have comprehensive car insurance. Rob tried to resolve the dispute with Mick and sent him a letter of demand to pay for the cost of repairs to his car.