Full compensation for third parties in auto insurance: see!

Have you been the victim of an accident or caused a collision and have questions about how full compensation for third parties works in auto insurance? Read this article and understand how this problem can be resolved.

All drivers are at risk of being involved in traffic accidents every day, regardless of how cautious a person is behind the wheel, it is impossible to predict when an accident will happen.

To give you an idea, according to the Federal Council of Medicine, every hour, around five people die as a result of traffic accidents in the country.

Based on this data, imagine the number of collisions and accidents that could result in the total loss of a vehicle.

The numbers are truly alarming and, even if you respect traffic laws, there are always bad drivers or inattentive drivers on the streets.

Therefore, it is important to know what your rights are and what to do in the event of a collision or other accident in which one of the people is a total loss.

To help you better understand these cases, we have prepared an article explaining how full compensation for third parties works in auto insurance. Read on.

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When is a vehicle considered a total loss under third party coverage?

Before explaining how full compensation for third parties works in auto insurance, it is important that you understand when a third party's vehicle can be considered a total loss.

When it comes to the insured's car, it will invariably be considered a total loss in cases where the repair costs 75% or more of the vehicle's purchase value.

However, when we talk about total loss in third party coverage, things don't work quite like that.

Insurance companies may use this same criteria or end up considering it a total loss even when repairs do not reach 75% of the vehicle's value.

This will depend directly on the company's internal criteria and rules and the vehicle's situation.

This possibility exists because, according to SUSEP, the body that regulates the insurance sector in the country, insurers can declare a vehicle as a total loss with repairs worth a maximum of 75% for third-party vehicles.

It is important to know that if the third party does not agree with the insurer in this situation, they can contact the company and try to reach an agreement.

The best way is to seek your rights legally, either through small claims or with the help of a lawyer.

Understand how full compensation for third parties works in auto insurance

When a person takes out third-party coverage, they must stipulate a fixed amount for repairs to other vehicles to be carried out by the insurer during the term of their policy.

However, this value is only used in cases of partial loss.

When it comes to a case of total loss, the insurer adopts other criteria to promote compensation for the third party.

This is possible because, in an auto insurance contract, there are no clauses to stipulate what value the insurer must use for full compensation to third parties.

In the case of the insured vehicle, there are only two possibilities for full compensation, which can be defined at the time of taking out the insurance.

The first and most common option is full referenced compensation, which uses the Fipe Table (a table that expresses the average price of vehicles) to define the amount to be compensated.

The second option is the defined full compensation, which will use a fixed amount stipulated by mutual agreement, both by the insured and the insurer, at the time of contracting the auto insurance.

In the case of third parties, there is no rule.

Full compensation for third parties in auto insurance will always be made according to the average market value of the victim's vehicle.

However, this value does not necessarily need to be calculated based on the Fipe Table.

It can also be calculated based on market research on the average value of the vehicle, carried out in the region where the victim is located, for example.

Regardless of the type of calculation the insurer makes, the path is always the same.

It must present a proposal for full compensation to the third party and, if the third party accepts, he will be compensated in accordance with the treaty.

However, if he does not accept, you can make a counteroffer, duly based on real data.

And the insurer must analyze this response.

If she refuses to accept the third party's counteroffer, and no agreement is made.

The only way for the third party to obtain their rights will be through the courts.

It is worth remembering that traffic victims are also entitled to mandatory DPVAT insurance (Personal Injury Insurance Caused by Motor Vehicles on Land) which covers death, disability and medical expenses.

And what if, in addition to the total loss, there are bodily or moral damages?

If, in addition to the vehicle being considered a total loss, the third party suffers bodily injuries or moral damages.

He may also be compensated for this, even if he receives full compensation for the vehicle.

In this case, the margin contracted by the insured for partial losses to third parties will be used.

This amount may cover expenses such as medical assistance, surgeries, treatments, hospitalizations, medications and more.

In addition to also covering legal expenses and legal compensation.

It is worth remembering that, if the value of these compensations exceeds the maximum contracted by the insured, it will be his/her responsibility to cover the difference.

Important tip!

There is no deductible payment for activating third party coverage, not even in cases of partial loss, much less total loss.

Therefore, if the person who caused the accident passes the deductible amount on to the victim, this will be done in bad faith.

Now that doubts about full compensation for third parties in auto insurance have been cleared up, you no longer need to worry about this issue if you find yourself in a situation like this.

Take advantage of the fact that you now know more about some of the many advantages of having third-party coverage and get a quote.