What you need to know about vehicle impact damage

(Updated 26 August 2024)

Impact damage is an insured peril included in most property insurance policies. While the damage is more commonly caused by a third party to the insured property, it is not uncommon for the impact incident to be a case of the insured property causing damages to third party property.

Impact damages occur most frequently at a property’s vehicle access points. When such incidents do occur there is often some confusion as to the correct procedures to follow.

Determining the cause of damage

An access gate causing damage to a vehicle may occur as a result of two possible reasons.

Firstly, the gate malfunctioned and closed on the vehicle, causing the damages. In such a case, the presumption of liability of the property owners is the most common interpretation.

While the damage to third party property may have been caused by the insured property, the liability of the insured property owners cannot be assumed. Liability is dependent on whether the property owners are deemed to have been negligent. So a gate hitting a vehicle does not automatically confirm the negligence of the property owners.

Secondly, damage may occur due to driver carelessness. A driver may proceed without caution or may ignore the current circumstances and drive through the gate regardless. In such a case, the driver would invariably be found responsible for the damage suffered.

How to react

When an impact damage incident occurs, it is important that the property owners react appropriately to ensure that they do not compromise their insurance cover in any way. The first and most important principle – never admit liability, no matter what the circumstances. To do so in the face of a potential liability claim is contrary to the terms of your policy.

Liability claims are by nature legally complex. As such the insurer reserves the right to handle all correspondence and negotiations in the defence of any third party demand received. It is therefore imperative that the property owners do not admit liability nor enter into correspondence with a third party. Failure to comply with this may result in the rejection of your liability claim.

At the time of the incident – or as soon as reasonably possible thereafter – all parties concerned should exchange full details to ensure an efficient claim process. The property owner should record all relevant third party details (including vehicle, driver, owner and insurer) to facilitate a potential recovery by their insurer.

The property owner should immediately notify their broker or insurer of the incident and the potential liability claim. A suitably qualified contractor should be appointed to assess the damage to the property and determine how the damage occurred. If gate malfunction was the cause, the insurer will require a detailed report from a suitably qualified contractor to this effect. Every effort must be made to confirm the facts of the incident that resulted in the damages sustained.

Where damage to the gate is extensive and property security has been compromised, the property owner’s insurance may provide some indemnity for additional security. It is vital to check your insurance cover before taking reasonable steps to safeguard the insured property.

When vehicle owner has no insurance

It is not uncommon for the vehicle owner to be determined that they were not at fault and to take offense when advised that they need to claim for their damages from their vehicle insurance policy. If the vehicle has no insurance, then this should be confirmed by way of a sworn affidavit.

Once the insurance claims have been submitted the various insurers will communicate with each other regarding a potential recovery of damage costs. In the event that the vehicle owner has no available insurance cover, they may then submit a written demand to the property owners. This should include their contact details, full details of the incident, why they hold the property owners liable for their damage, a copy of their drivers license and repair quotes (preferably two) for the damages to their vehicle. All correspondence received by the property owners must be immediately passed on to their insurer. The insurers will then correspond with the vehicle owner accordingly. Once the insurer confirms (or rejects) liability, they will respond to all parties accordingly.

Separate legal entity

In the event that the vehicle owner is also a member of the community scheme, it is important to understand that the vehicle owner is recognised as a separate legal entity in his role as a community scheme owner.

Where the third party is a member or resident of the scheme, recovery of the scheme’s liability claim excess direct from the third party should never be attempted as this may jeopardise the insurer’s right to recover. Even if offered, the insured (the scheme) should decline, and refer the third party back to the insurer. The only time the insured should try and recover such excess, is if the insurer confirms they will not pursue recovery and waives their rights therein.

There are many different scenarios and dynamics when it comes to incidents at the gate. In this article, we simply refer to the basics.