Knock-for-Knock Agreement

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An knock-for-knock agreement is an agreement between two insurance companies, the policy-holders for whom have sustained losses in the same insured event (usually a motor accident), whereby each insurer pays the losses sustained by its own policy-holder, regardless of who was responsible for an accident.

[edit] Rationale

The rationale is economic and administrative efficiency: While an insurer may be able to pursue a recovery from the party responsible for an accident of from its policy-holder, this is a costly administrative procedure. The Knock for Knock Agreement simplifies recovery claims among insurers and, over time, attributes costs fairly amongst insurers.

[edit] Other contexts

'Knock for knock' is also used in a specific, analogous senses, for example, the following, cited in the "Law at War", from the US Army website [1]:

In addition to handling these routine matters, the chief of the Claims Section -participated in the negotiations with the Korean government concerning the payment of foreign claims generated by troops of the Army of the Republic of Korea who were active in South Vietnam. In fact, the MACV Staff judge Advocate's office was to play a vital role in the negotiation and implementation of certain claims agreements with the Vietnamese government and the Free World allies which came to be known as "knock-for-knock" agreements. These compacts contained provisions whereby the government of one nation waived the claims against the government of the second nation for damage to government property. The agreements did not, however, waive the personal right of an individual to claim damages in the case of negligence of a member of the force of another allied nation. The arrangements nevertheless removed a potential irritant to the relationships among the Free World forces.

LAW AT WAR: VIETNAM 1964-1973, Chapter 5: Claims Administration