What if I don't have insurance or don't want to use my insurance?
If you do not have insurance, or if you have decided not to use your insurance company, get legal advice about what to do.
Do I have to pay for the property damage?
Generally, the person who is at fault in the accident is liable to pay for all the damage.
It is important to get legal advice about who was at fault. In some cases the courts decide that both parties are partly responsible for the accident.
Even if the police have charged one of the drivers with a traffic offence, this does not always mean they are liable for the vehicle damage.
How do I deal with a claim against me for property damage?
If the accident was your fault, negotiate with the other party or their insurance company as soon as possible.
Ask for copies of all the quotes and if you think they are reasonable, arrange to pay the debt.
You can offer to pay by instalments but the other party or their insurance company does not have to accept that. If you cannot pay the full amount, work out what you can realistically pay. Give the reasons why you cannot afford to pay the full amount straight away.
A financial counsellor may be able to help you. For financial counselling contact the Financial Counselling Hotline on 1800 007 007 or visit the Financial Counsellors Association of WA website for information on where to find a financial counsellor. You can also find the financial counsellor nearest you online on the Australian Securities and Investments Commission MoneySmart website .
What if I do nothing?
Do not ignore the problem.
The other party or their insurance company may start a court case against you which will increase your costs.
Once a court judgment has been made against you:
- You may be required to go to a means inquiry.
- If you are working, your employer may have to pay some of your wages towards the debt.
- Your property may be seized and sold to pay the debt.
- Action may be taken to have you made bankrupt.
For more information about what happens if a judgment is made against you and you do not pay If a judgment is made against you - enforcement process.
Sometimes you can stop these procedures by applying to the court. You should seek legal advice if this applies to you.
What if I can't afford to pay anything?
If you cannot afford to pay anything at all, and you have no assets to be seized or sold, there are at least two options:
- Write to the other party if they are not insured setting out your financial situation. Point out that if they take you to court they are unlikely to obtain any money. If the other party is insured, you can also do this, or you might be able to use the General Insurance Code of Practice to try to have the debt set aside. All members of the general insurance industry are encouraged to adopt the standards set out in the code. It covers an internal dispute resolution process and external review through the Financial Ombudsman Service (FOS). Get legal advice about this option.
Visit the Financial Ombudsman Service web site or contact the FOS on 1800 367 287 for more information on the Code or the Insurance Council of Australia web site to read or download a copy of the General Insurance Code of Practice.
- In some circumstances consider voluntary bankruptcy. There are many negative consequences of going bankrupt. It is essential that you seek advice from a financial counsellor and/or a lawyer if you are thinking about this option.
Where can I get more information?
- Contact Legal Aid WA's InfoLine on 1300 650 579 for information and referral.
- For advice, information and referral for debts owed to insurance companies where you are in financial hardship contact the Insurance Law Service on 1300 663 464. Fact sheets and sample letters are available on its website as well as sample letters.
- For more information on bankruptcy go to the Australian Financial Security Authority web site.
Last reviewed: 13/08/2014