Step 1. I’ve received a letter of demand and an itemised invoice of damages claimed
Checking an itemised invoice of damages claimed Once you have the itemised invoice of damages claimed you should check:
- Was the damage being repaired caused in the accident?
- Is the repair method reasonable given the age, make and model of the car?
- Are the repair costs correct?
- You should write back to the other party to raise a dispute.
- You should mark any negotiations “without prejudice” so that they cannot be used as admissions in litigation in the future.
- You should make a clear offer of a negotiated outcome in your letter (such as a full and final settlement offer of a reduced amount). This can be used in relation to any dispute about the costs of proceedings to show you made genuine efforts to resolve the dispute.
Step 3: Confirm any settlement in writing It is always best to get the settlement confirmed in writing. Be clear on what it is you are settling – is it the full amount, or just the cost of repairs? does it include hire car costs? If you only settle the repair cost, you can find yourself being chased later for other costs (eg. hire car) from the insurer, or the other driver directly. What if we can't agree on a settlement? Ultimately, if a negotiated outcome cannot be reached, the other driver (or their insurer acting in their name and on their behalf) can start court action for the amount they believe is justified. A court would then decide the correct assessment of damages based on the available evidence. Legal costs and court costs will generally be added onto the amount claimed if this happens. You can choose to lodge a defence, but you must be careful and get legal advice first. The court may make orders that one party pay the other party's costs – for instance, the courts may order the losing party pay the reasonable legal costs of the winning party. REMEMBER: If you are arguing that the amount claimed is too much, this means you still owe some of it. Be prepared to pay, or start paying, the amount you agree you owe. If you are experiencing financial hardship in relation to the damage (no matter if the amount was reduced) and you cannot afford to repay, you should make an appointment to see a Financial Counsellor (1800 007 007) and negotiate under the General Insurance Code of Practice for a reduced amount, payment plan or a release from the liability. Please see our “I’ve had a car accident and I’m uninsured fact sheet.