Hi ,

I hope the year has been going well for you!

Recently, one of my clients had a minor car accident. His car was sideswiped by another vehicle that was trying to cross three lanes to get into a right-turn-only lane. A day later, the other driver offered to settle privately.

At this stage, many people might consider following the third party’s lead and agreeing to a private settlement. However, there are crucial steps to take to ensure you are properly compensated and legally protected.

What Should You Do If You Enter Into a Private Settlement?

1️⃣ Get an Accurate Repair Estimate

Before agreeing to anything, take your car to one of your insurer’s authorized workshops to obtain a written estimate of repair costs.

Avoid heading to a workshop recommended by the other driver, as this ensures you receive a fair and unbiased estimate.

2️⃣ Prepare and Sign a Private Settlement Agreement

Both parties should complete and sign a private settlement form or letter that includes:

• Accident details (location, date, time)
• Names, ID numbers, and vehicle registration numbers of both drivers
• Terms of settlement, including:
• ✅ Agreement that no personal injury or death was involved
• ✅ Confirmation that both parties agree to settle amicably
• ✅ Compensation amount to be paid (or agreement to bear own costs)
• ✅ Agreement not to file a police report or future claims
• ✅ Acknowledgment of compensation received (if applicable)
• Signatures of both parties

3️⃣ Report the Incident to Your Insurer Within 24 Hours

Regardless of whether you settle privately, you must report the accident to your insurer within 24 hours. Failure to do so may result in:

❌ Rejection of future claims if a claim later becomes necessary

❌ Loss of your No Claim Discount (NCD) upon renewal

❌ Possible refusal by your insurer to renew your policy

Even with a signed private settlement, there is always a risk that the other party might still decide to file a claim against you later. Submitting the completed settlement form to your insurer helps protect you from any future disputes.

If you ever find yourself in such a situation and need guidance, feel free to reach out. I'm happy to help!

Stay safe on the roads!

Best regards,

Zest Chia

Executive Wealth Consultant | Associate Estate Planning Practitioner |

Licensed General Insurance Advisory

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