Direct settlement agreement

  • In May 2000, a group of insurance companies, operating the Motor branch in Greece established a compensation system, under the name of “Direct Settlement of Agreement”. The “Direct Settlement of Agreement” is a special compensation system exclusively for the non- liable insured drivers, involved in a car accident.
  • The purpose of the system is to service and facilitate the non- liable driver by allowing him to be compensated by his own insurance company.
  • All insurance companies- members of the Hellenic Association of Insurance Companies, operating the Motor branch, can accede to the “Direct Settlement of Agreement”
  • According to the “Direct Settlement of Agreement”, in case of a car accident taking place in Greece and provided that both insurance companies are members of the Agreement, the non- liable driver’ s insurance company is allowed to proceed to his refund, on behalf of the liable driver’s insurance company. 
  • Until the 1st of September 2005, only material damages could be compensated by the “Direct Settlement of Agreement”, but to that point on, small bodily injuries are also covered.
  • Without change of the existing legislation with regard to compulsory insurance of civil liability arising from motor circulation, the Agreement introduced a service system for the insureds, on the grounds that they are compensated promptly by their own insurance company.
  • A new development which is worth- mentioned is that the “Friendly Statement” form, considered indispensable for the settlement of the accident by the “Direct Settlement of Agreement”, is no longer necessary.
  • Part and partial of the Agreement are the Culpability Boards. These boards contain model cases of accidents that indisputably lead to a conclusion about which driver is liable or partially liable for the accident. As already mentioned, when the insurance companies refund their customer, they act on behalf of the liable driver’s insurance company.
  • The financial transaction between the two involved insurance companies is settled via a counterbalancing system, operated by the Hellenic Association of Insurance Companies. The payments are settled in a monthly basis and the returns are calculated with averages.
  • The supervisory body of the “Direct Settlement of Agreement” is the Administrative Committee- a ten- member committee that always assembles at the presence of a legal advisor. The Counterbalancing Office is responsible for the payment settlements, the calculation of averages and the statistic surveillance of the Agreement. The supreme body of the Agreement is the General Meeting of the contracting companies. The Administrative Committee is responsible for the annual renewal of the Member Record.
  • Last but not least, it should be mentioned that the insured motor fleet of the Agreement’s member- companies represents the vast majority of the total insured motor fleet in our country.