What Happens If A Car Accident Private Settlement Fails (2024)

Not every car accident needs to result in an insurance claim. Here’s how a private car accident settlement works in Singapore, and what you need to know before pursuing or accepting one.

Car accidents are a fact of life, especially given Singapore’s congested roads and the increasingly reckless driving habits on display.

While getting into a fender bender is more a matter of when, not if, a road accident need not always entail making an insurance claim and risking a spike in your motor insurance premiums at the next renewal.

Drivers in Singapore are allowed to enter into private settlements for car accidents, but this is only allowed (or advisable) in specific scenarios.

In this article, we will be taking a look at how a private car accident settlement works, and why you may want to opt for this path instead.

What Happens If A Car Accident Private Settlement Fails (1)

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What is a car accident private settlement?

You may be thinking, “Wait, I can settle a car accident privately, without getting my insurer involved?” And, of course, the answer is yes.

When you get into a minor traffic accident, you can offer to enter into a private settlement with the other party. What this means is that all parties agree to a resolution to the accident without making claims against the other’s insurer.

However, both (or all) parties who have a right to claim damages have to agree to settling things privately before you can proceed. It’s not a matter of just telling the other party to call you, and that’s that.And be alert to "insurance specialists" who suddenly appear near the accident site and may not have your best interests. Engage only with the driver and your insurer.

Don’t mistake a private settlement as something you can take lightly; private car accident settlements are considered as binding and legal contracts that carry legal consequences – more on that later.

Why a car accident private settlement may be preferable

One word (or rather, three): No-claims Discount (NCD).

As you’re probably aware, your NCD can help you save hundreds of dollars a year on your motor insurance premiums, but it takes a painfully long time to grind up to the maximum discount.

You’ll only get 10% NCD per year of claims-free driving, which means you’ll need to have a spotless record for five full years before hitting peak 50% NDC.

But yet, having just one single at-fault accident will knock your NCD from 50% down to 20%, erasing three years of hard work at one go.

And, if you should suffer another accident soon after, your NCD gets reset to 0%, and it’s back to paying full premiums for at least another year.

Understandably, rivers wish to protect their hardwon NCD by purchasing an optional NCD protector, which gives you one free pass for an at-fault accident claim per year. But, this involves spending yet more money.

However, if an accident is settled privately, your NCD will not be affected! This is because the NCD penalty is only applied when an at-fault accident claim is made against your motor insurance policy.

As such, choosing a private settlement in a car accident can actually save you from having to eat inflated driving expenses down the road.

Related to this topic:

FWD Car Insurance Review (2022): A Plan with Lifetime NCD Guarantee

Allianz Motor Protect Car Insurance Review: Lightweight But Adequate Coverage, Easy On The Wallet

MSIG MotorMax Car Insurance (Review): Auto Insurance with Low Premiums and Targeted Benefits

When should you enter into a car accident private settlement?

Ok, so a private settlement can be advantageous, but does that mean that you should try to settle any and all traffic accidents privately?

Well, no – there are certain scenarios in which a private settlement cannot be used as a means of resolution, but we’ll go over that in more detail in the next section.

As a general rule, you should only consider a private settlement if the damage to your vehicle is minor, and the cost of repairs is unlikely to exceed the excess on your motor insurance plan.

This is especially relevant if you’ve opted to pay a higher excess in exchange for lower premiums.

(Note: Insurance excess is borne by the policyholder, unless a waiver is purchased. In some cases, an insurer may offer an excess waiver as a loyalty bonus for renewing your policy.)

When can you not enter into a private settlement?

A private settlement cannot be entered into if the car accident resulted in:

  • Death or bodily harm to any person, including a non-driving party (such as a pedestrian)
  • Significant damage to any property, especially if government property or public utilities was damaged
  • Hit-and-run incidents

Under these circumstances, the standard route of accident reporting is your only option. This includes contacting the police and/or emergency services for assistance, as well as calling your insurer’s accident hotline.

Should you still inform your insurer about the accident even though you’ve decided to settle privately?

Yes, absolutely.

Don’t be mistaken that just because you and the other party have agreed to settle the accident privately, there is no need to report the accident to your own motor insurer. That is false.

You are still required to inform your insurer about the accident (but you do not have to submit any claims), and you’ll need to do so within 24 hours.

Do not take this lightly. Failing to notify your insurer about the accident can have some pretty severe consequences. If your insurer finds out, they may:

  • Reject a future insurance claim should the claim exceed the amount agreed upon in the private settlement
  • Dock your NCD when your policy is up for renewal
  • Decline to renew your motor insurance policy altogether

Related to this topic:

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What should you do if you enter into a private settlement for a car accident?

Here’s a step-by-step guide for entering into a car accident private settlement.

  1. Bring your vehicle down to an authorised workshop for a written estimate of the repair charges. This is the most important step in the process, and will form the basis upon which fair compensation may be decided.

You should only go to a workshop approved by your insurer, in case the actual cost of repairs exceeds the agreed compensation, sticking you with paying the remainder.

  1. Next, complete and sign a private settlement form or letter. You may use a template provided by your motor insurer, or consult a legal firm in preparing one.

In particular, a private settlement letter should include:

  1. Details of the accident (location, date and time)
  2. Particulars of parties involved and their vehicles (full names, identification numbers, vehicle registration numbers)
  3. Terms of the agreement, which may include the following statements:
    1. That no personal injury or death was involved in the accident
    2. That all parties agree to settle the matter amicably
    3. Of the amount to be paid by one party to the other
    4. That both parties will not make a police report of the accident;
    5. That neither party will subsequently file a claim for damages based on the accident
  4. Acknowledgement of receipt of compensation, if any
  5. Signatures of parties entering into the settlement

What happens if the terms of the settlement are breached?

If all parties manage to settle the accident amicably and satisfactorily, you may consider the matter closed and go on your merry way.

However, if the other party changes their mind and violates the terms of the settlement – such as by not paying the agreed compensation, whether partially or in full, or by lodging a separate claim for damages outside of the private settlement – there is grounds for legal action to be brought.

Such an event is subject to remedies under the law for breach of contract, including seeking compensation or damages.

Resolving the breach may involve court proceedings for arbitration. Claims under S$20,000 may be directed to the Small Claims Tribunal for resolution.

Read these next:
10 Best Car Insurance Plans in Singapore (August 2022)
15 Ways To Reduce Car Insurance Costs in Singapore 2022
5 Things to Do After a Car Accident
Pros and Cons of Staying With the Same Car Insurance Company
5 Things You Need to Check When Getting or Renewing Your Car Insurance Policy

What Happens If A Car Accident Private Settlement Fails (2024)

FAQs

When an insurance company won't settle? ›

When an insurance company refuses to settle, it may be liable for the full amount of the excess judgment after trial, notwithstanding the lower policy limits. This duty of good faith aligns the insurance company's incentives with those of its insured.

How to negotiate a cash settlement with insurance company? ›

Tips for Negotiating With an Insurance Claims Adjuster
  1. Come well-prepared with supporting evidence. Records and documentation are critical components of the process. ...
  2. Calculate a full settlement amount. ...
  3. Know your bottom line. ...
  4. Beware of the first offer. ...
  5. Get the settlement offer in writing. ...
  6. Read the fine print.
Feb 17, 2023

What does it mean when an insurance company wants to settle? ›

A settlement agreement includes releasing all liability for claims against the party who caused your accident. The insurance company is not responsible for anything else after you sign. No matter what happens, you cannot ask for more money in the future, and you cannot take the case to court.

What if I rear ended someone no damage to their car? ›

Call the Police and Report the Accident

Highway patrol can provide police reports for all types of auto accidents, even if there is no damage. Deciding not to call the police after coming to an agreement with the other driver is a very risky move and not advisable under the law.

What happens if a settlement is not reached? ›

What happens when there is no settlement? If no settlement agreement is reached, your claim will be scheduled for a hearing.

Do insurance companies always offer a settlement? ›

Unless the insurance representative has a solid reason not to pay the claim, you can almost always expect a settlement offer after filing a claim with an insurance company.

How do I ask for more money in my insurance settlement? ›

7 Tips for Successfully Negotiating for More Money with the Insurance Company
  1. Seek Legal Representation Right Away. ...
  2. Think About a Settlement Amount. ...
  3. Be Cautious About What You Reveal to the Adjuster. ...
  4. Don't Necessarily Accept First Offer. ...
  5. Request the Adjuster to Justify a Low Offer. ...
  6. Highlight Emotional Points.
Nov 9, 2022

How do I ask for more settlement money? ›

You Can Negotiate a Settlement. Here's How
  1. Hold Onto Everything. ...
  2. Open an Insurance Claim in a Timely Manner. ...
  3. Estimate the Value of Your Claim Carefully. ...
  4. Write an Effective Demand Letter. ...
  5. Reject the Insurer's First Offer. ...
  6. Highlight Facts that Benefit You. ...
  7. Remain Calm During Negotiations. ...
  8. Hire a Lawyer to Help.

Can you argue with an insurance claims adjuster? ›

Negotiate with your insurance adjuster

If you feel that the vehicle appraisal from your car insurance company is too low, you can opt to negotiate with your claims adjuster.

How long before an insurance company offers a settlement? ›

Insurance companies do not like to pay out much on injury claims, so it might take time to negotiate. Most of the time, settlement negotiation takes a few weeks or months after getting the first offer.

What is a good settlement offer? ›

Definition of a “Good” Offer

A good settlement offer works in your favor and puts you back in a position of favor after the settlement is made final. Settlement offers need to consider all of the factors that have touched you in relation to your losses, damages, and personal injuries.

What counts as a rear-end in an accident? ›

A rear end accident occurs when a driver hits the vehicle directly in front of them from behind. They often occur at a redlight, a stop sign, or in congested traffic. A majority of rear-end accidents happen at low speeds. But they can occur at high speeds on highways or other high-speed roads.

Is it always my fault if I rear ended someone? ›

Who is at fault in a rear-end collision? In most rear-end motor vehicle accidents, the rear driver is at fault for the accident. However, the rear driver is not always at fault in a rear-end collision. The lead driver or another vehicle could be the cause of the rear-end accident.

How much impact can a rear bumper take? ›

Today, bumpers are designed to withstand impact forces equivalent to a vehicle hitting them at 2.5 mph without damaging the frame or other major components. However, these impacts can still damage the bumper cover. A minor bump in a parking lot may hurt the appearance of your car, but not its functionality or safety.

How often does settlement fail? ›

While 2021 data showed similar trends, ESMA noted equity settlement fails reached 12% three times between November 2020 and June 2021, but this is still below the pre-pandemic highs when fail rates hit 14%.

At what point do most cases settle? ›

It is well known within the legal world that most cases settle before they ever get to trial. Generally, less than 3% of civil cases reach a trial verdict. So, around 97% of cases are resolved by means other than trial.

What does it mean when a settlement failed? ›

A trade is said to fail if on the settlement date either the seller does not deliver the securities in due time or the buyer does not deliver funds in the appropriate form.

How much are most car accident settlements? ›

The average car accident settlement could vary depending on the facts and circumstances of each individual case. Recent U.S. data show that a large number of car accident cases settle for between $14,000 and $28,000 with the average amount around $21,000.

Why is the first settlement offer so low? ›

You Should Expect the First Settlement Offer to Be Low

Above all else, the company is attempting to make money. The more the company pays out in settlements, the less money it will bring in. Of course, the insurance company also has a legal obligation to pay out full and fair injury settlements.

Why settlement offer is so low? ›

When the insurance company thinks the victim is partially at fault or that he or she does not have a strong case, they may be more likely to make a lowball offer. The insurance company does not feel much pressure if they think you have a weak case.

How to debate a settlement to get more money from an car accident? ›

More Auto Accident Settlement Negotiation Tips
  1. Don't Be in a Hurry. ...
  2. Don't Accept First Offers. ...
  3. Always Have Good Documentation of Your Damages. ...
  4. Follow Through with Medical Treatment Guidelines. ...
  5. Review Your Car Insurance Policy. ...
  6. Be Patient but Persistent. ...
  7. Hire an Attorney Early.
May 11, 2023

How do you respond to a low settlement offer? ›

To respond to a low settlement offer, evaluate the reasons for the offer. Determine the accurate value of the claim and the amount you are willing to accept to resolve it. Create a demand letter, provide more information or continue to pursue your legal claim as appropriate based on the circumstances.

Can you ask for more money when your car is totaled? ›

Yes, you can negotiate the value of a totaled car with your insurance company. You'll need to do some research on the actual cash value (ACV) of your car and learn about your state's total loss threshold, but you can negotiate a total loss claim just like you can negotiate any other claim.

How do people pay large settlements? ›

Most settlements get paid through a check from the insurance company. You'll usually receive your funds from your lawyer after they've cleared the check and deducted any fees.

How much should I ask for a settlement? ›

To get a general idea of settlement, add up the costs in medical bills, damages, and lost wages, and multiply the sum by three. This may be around the amount in the settlement you can receive after a car accident. Compensation for pain and suffering is only given to those who are injured in a car accident.

How do I make a settlement offer? ›

Your 6-step DIY Debt Settlement Plan
  1. Assess your situation. ...
  2. Research your creditors. ...
  3. Start a settlement fund. ...
  4. Make a debt settlement offer to the creditor. ...
  5. Review a written debt settlement agreement. ...
  6. Pay the agreed-upon settlement amount.
Nov 3, 2022

What not to say when talking to insurance adjuster? ›

Some key phrases to avoid saying to an insurance adjuster include: “I'm sorry.” “It was all/partly my fault.” “I did not see the other person/driver.”

How do I argue with my car insurance adjuster? ›

Tips For Negotiating With A Car Insurance Adjuster
  1. 1 – Start With A Settlement Amount in Mind. ...
  2. 2 – Don't Take the First Offer. ...
  3. 3 – Make Sure You Tell Them About The Emotional Damage. ...
  4. 4 – Get The Final Settlement In Writing.
Feb 22, 2023

What is most appealing about being a claims adjuster? ›

Benefits of being a staff claims adjuster: A steady paycheck that does not fluctuate from month to month. Employment benefits like health insurance, dental coverage, paid vacation and company contributions towards your retirement (401K) plan. Work a fixed number of hours per week.

What are the final stages of settlement? ›

After a case is settled, meaning that the case did not go to trial, the attorneys receive the settlement funds, prepare a final closing statement, and give the money to their clients. Once the attorney gets the settlement check, the clients will also receive their balance check.

How long does it take for a claim to be paid? ›

From the day your compensation amount is settled, it could take up to 28 days for you to receive your payout. But in many cases, it will be much faster. You may be able to get your compensation within just a few days of your settlement being agreed with certain insurers.

Can you just keep cash from a car insurance payout and not fix your car in Florida? ›

As long as you own your car outright, you can do whatever you want with the claim money you receive from your insurer. This means that you can keep any leftover money from your claim. However, it is very important to never intentionally overestimate the cost of repairing your car.

How long do most car accident settlements take? ›

If you and the insurance company are able to agree on a fair settlement, the process to receive your check typically takes around four to six weeks. The insurance company will have you sign a release form.

Why do lawyers often try to negotiate a settlement? ›

Generally, it is best to negotiate rather than litigate if at all possible. Most disputes can be resolved if two people will just remain reasonable and try to bargain for an agreement. Doing so also has the benefit of avoiding expensive attorney fees and litigation costs.

Should I just accept a settlement offer? ›

It is not in your best interest to accept a settlement offer without speaking with an attorney. The initial settlement offer from the insurance company is probably not fair. The offer may be much lower than the value of your damages. If the insurance company sends you a check, do not cash the check.

How long does it take to negotiate a settlement? ›

The average settlement negotiation takes one to three months once all relevant variables are presented. However, some settlements can take much longer to resolve. By partnering with skilled legal counsel, you can speed up the negotiation process and secure compensation faster.

What is a bad settlement better than? ›

ANALYSIS: A bad settlement is better than a good judgement.

What are the disadvantages of settlement? ›

Disadvantages of Settling a Case

For a defendant, this means that the defendant doesn't get a chance to avoid liability. The defendant has to provide some remedy to the plaintiff to convince the plaintiff to settle, so by agreeing to a settlement, the defendant loses a chance to defend himself.

Who is usually at fault in a rear-end collision? ›

Rear-end collision fault is a common topic of concern among those who have been in car accidents. It is also the source of misconceptions that can make it difficult to know your legal rights after a crash. Generally speaking, the driver in back will be found at fault for a rear-end collision.

Who gets hurt worse in a rear-end collision? ›

The person who is rear-ended is almost always injured to a greater degree than the person who hit them. The major factor at play in why this happens is muscle bracing. The person who is in the primary vehicle has more time to brace for impact.

How much damage can a rear-end collision cause? ›

Drivetrain. A rear-end collision can damage your drivetrain. The drivetrain of your car includes the transmission, driveshaft, axles, and wheels. In a rear-end collision, the pressure can push your exhaust system forward and cause damage to your catalytic converter, muffler, exhaust manifold, engine mounts, and more.

What if someone slams on their brakes and you hit them? ›

While you may consider that an accident must be the fault of the lead or rear driver for recklessly slammed on their brakes and almost 100 percent of rear end collisions, the rear driver involved is found out to be responsible or at fault in a rear end collision.

What if I rear-ended someone no damage to their car? ›

Call the Police and Report the Accident

Highway patrol can provide police reports for all types of auto accidents, even if there is no damage. Deciding not to call the police after coming to an agreement with the other driver is a very risky move and not advisable under the law.

What does Rerended mean? ›

(computing) To render again or anew. There was a slight delay while the program rerendered the image in its new perspective.

What is hidden damage? ›

Hidden bumper damage and hidden trunk damage are common types of issues following a rear-end collision. The angle and speed of the crash can impact the kind of damage your vehicle incurs, but generally, the bumper and trunk take the brunt of the impact.

At what speed does a bumper get damaged? ›

Many impacts tests have shown that even when the impact exceeded 17 mph, the collision does not cause any observable bumper damage. Accordingly, at speeds of 17 mph or greater, the occupants can suffer injury even if the bumper looks fine.

What is the 5 mph bumper rule? ›

The most rigorous requirements applied to 1980 through 1982 model vehicles; 5-mile-per-hour (8 km/h) front and rear barrier and pendulum crash tests were required, and no damage was allowed to the bumper beyond a 3⁄8 in (10 mm) dent and 3⁄4 in (19 mm) displacement from the bumper's original position.

What to do if insurance claim is taking too long? ›

But if your company is taking too long with a claim, you can also contact your state's insurance office and file a complaint. Your state's insurance office might be able to help resolve any disputes you're having with your company, and could help push the claims process forward once it's stalled.

What is it called when an insurance company refuses to pay a claim? ›

Bad faith insurance refers to an insurer's attempt to renege on its obligations to its clients, either through refusal to pay a policyholder's legitimate claim or investigate and process a policyholder's claim within a reasonable period.

How long does it take for insurance companies to negotiate a settlement? ›

Negotiating a Settlement

Insurance companies do not like to pay out much on injury claims, so it might take time to negotiate. Most of the time, settlement negotiation takes a few weeks or months after getting the first offer.

What happens if the insured and insurer Cannot agree on how to settle a claim? ›

If the insured and the insurer cannot agree on the total amount, a lawyer can act as a mediator. The lawyer will attempt to resolve the claim out of court. If the two parties cannot do this, the plaintiff might file a lawsuit.

How long does it take for an adjuster to make a decision? ›

Usually, you'll hear from an insurance adjuster within three days of making the claim to discuss matters. If they need to survey the damage, it can be a few more days. If you use a repair garage that is affiliated with (or at least approved by) your insurance company, the process can speed up a bit.

How long is too long to wait for an insurance claim? ›

How long do you have to report a car accident?
StateTime limit
Alaska10 days
ArizonaImmediately
Arkansas30 days
California10 days
1 more row
Jun 7, 2023

How can I speed up my insurance claim? ›

Contact Your Insurer Immediately

The sooner you contact your insurer to file a claim, the easier it will be for your adjuster to make the necessary inquiries to get your claim moving along. Call your insurance company as soon as possible – ideally from the scene of the accident, if you can do so safely.

What percentage of insurance appeals are successful? ›

As in our previous analysis of claims denials, we find that consumers rarely appeal denied claims and when they do, insurers usually uphold their original decision. In 2021, HealthCare.gov consumers appealed less than two-tenths of 1% of denied in-network claims, and insurers upheld most (59%) denials on appeal.

Why do insurance companies not want to pay? ›

Paying money for insurance claims is a large expense of an insurance company. The less that is paid out, the more money for their owners (the stockholders). Insurance companies will deny paying more in payouts when the investment market is expected to do a down turn versus when money is to be made.

What is good faith violation in insurance? ›

Specifically, insurance bad faith refers to a situation where an insurance company violates the duty of good faith it owes to its policyholders. The duty of good faith requires an insurance company to treat its policyholders reasonably, fairly and in good faith.

How do you negotiate a higher settlement? ›

Use positive, respectful and generous negotiating behavior to engender it in return and make it easier to influence the other side into accepting settlement proposals. Express a desire to meet the needs of the opposition so that they can repay the favor by meeting your needs.

What is the best way to negotiate a settlement? ›

The following guidelines can help you settle out of court and reach creative, mutually beneficial resolutions to your disputes, with or without lawyers at the table.
  1. Make sure the process is perceived to be fair. ...
  2. Identify interests and tradeoffs. ...
  3. Insist on decision analysis. ...
  4. Reduce discovery costs.
Apr 10, 2023

What if a settlement agreement Cannot be agreed? ›

If both parties cannot agree on a resolution, then nothing binds either party, and the case will proceed to trial. Once both parties memorialize the agreement as required by the law of the jurisdiction, a finalized settlement offer becomes binding.

What should be done first if the insurance claim has been rejected? ›

Your right to appeal

Internal appeal: If your claim is denied or your health insurance coverage canceled, you have the right to an internal appeal. You may ask your insurance company to conduct a full and fair review of its decision. If the case is urgent, your insurance company must speed up this process.

Can the insurer settle a claim or suit against the insured? ›

Insurance policies give the insurance company exclusive control over the defense and settlement of claims against their insured (An “insured” person is someone who purchased an insurance policy). In some cases, lawsuits against insurance companies seek damages exceeding policy limits.

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