Knock for knock is a motor insurance term used in the United Kingdom (UK) and other countries such Australia and basically describes an agreement between insurance companies where they pay the claims of their own clients following an accident. This principle does not divide up or assign blame and is applied usually to save time and money.
So a knock-for-knock agreement is an arrangement between two insurance companies where whereby each insurer pays the losses sustained by its own policyholder, regardless of who was responsible for an accident, after their insureds have sustained losses in the same motor accident.
In the UK though knock for knock agreements do not really exist anymore. Instead what some refer to now as knock-for-knock is when an accident claim is settled on a 50/50 basis. This would mean your insurance company will recover half of their expenditure but they will also have to pay 50% of the other side's expenditure.
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[Let CarInsurance.com help you find affordable auto insurance now.] So instead of the knock for knock where each party's insurer paid for their insured's own damage (thus you would need fully comprehensive coverage on your policy) what the 50/50 basis does is assign partial Liability to each driver and thus Third Party coverage should cover in part damage to the other car and the other driver's TP would cover your damages in part. Each would be in proportion to your percentage of liability. | 
