Would vehicle insurance be valid if someone else, other than the person whose name the insurance is under, drives it?

Question

Suppose I buy a car and I take insurance on it under my name. I let my friend drive, and he gets into an accident. Would I be able to file for insurance?

Answer 1

United Kingdom

Only the drivers named on the insurance policy are covered to drive the vehicle. For example, when I was learning to drive in my father's car, he arranged with the insurance company to add my name (for an additional fee).

However, my current policy does cover me to drive somebody else's vehicle with their permission (third party only, the minimum legal cover).

I believe there are exceptions for some commercial vehicle policies, where the owner might be hiring drivers ad hoc (from an agency, for example) and it would be impractical to have to wait for approval from the underwriter.

Answer 2

German law recognizes three different parties:

• Kraftfahrzeugführer, motorist
• Kraftfahrzeughalter, keeper/maintainer (entity paying for operations on own account)
• Kraftfahrzeugeigentümer, owner (entity as per § 903 BGB)

Let’s untangle the situation driver F damaging something (or someone) with O’s car maintained by K.

• Driver F is responsible for damage according to § 18 StVG (Verschuldenshaftung), beside §§ 823 ff. BGB (§ 16 StVG).
• Keeper K is responsible for damage, too, § 7 StVG (Gefährdungshaftung), beside §§ 823 ff. BGB (§ 16 StVG).
• Via § 115 Ⅰ 1 VVG there is also a claim against the motor vehicle liability insurance I.
• Owner O on the other hand does not need to worry about anything.

As the aggrieved party this gives you the advantage of (possibly) suing (up to) three different parties for damages. This is useful if for example driver F does not have any money.

• In practice the aggrieved party will always focus on the claim against insurance I.
• If appropriate the parties F, K and I might then sue each other for damages, but you as the victim are not bothered by this.
• As the keeper K you must effect insurance if the car is to be used on German public roads, § 1 S. 1 PflVG. The insurance must cover driver, keeper and owner. Insufficient coverage is a crime, § 6 PflVG.
• The policy holder on the other hand could then be yet another entity. Example: Parents buy their child a car and co‑insure the new car as part of their already existing policy (Zweitwagenversicherung).

An insurance policy is a contract, so – for umpteenth time – the contract is the primary source to answer your question (not what some randos on Law.SE wrote). Typically you are obligated to name drivers up front (so premiums are adjusted); failing to do so is usually associated with a contractual penalty.

Usually only the policy holder has a claim against his insurance (counter example: life insurance). So, yes, you can file a claim. Since the motor vehicle liability insurance is mandatory (§ 113 Ⅰ VVG, § 1 PflVG) the aggrieved party may file a claim directly against the insurance, § 115 Ⅰ 1 VVG.

Answer 3

You are talking about Germany. There and in many other countries there are two distinct meanings of “insurance”: Is an innocent victim protected from damages, and is the person responsible protected?

In Germany an insurance must almost always protect an innocent victim. As long as there is insurance (and it doesn’t stop if you missed payment for a month or two, and when it stops the insurance company will call police to your home), if the victim is not a third party (but insurances have paid for damage to family members when it is good for their image), and if the damage wasn’t caused intentional. In neither case does it matter who the driver is.

On the other hand, the insurance company can try to get their money back from the person responsible. Relevant to your question, that would happen if a car thief causes damage, or you lend your car to someone who doesn’t have a driving license or is drunk. Or your dad lends your car to his mate (which he likely had no right to do).

And the person in trouble is the person who caused the damage, not you. So the car thief, or your friend if he lied to you and had no insurance. Your only cost is that the insurance premium can go up which happens whenever the insurance company has to pay out (and cannot recover the money say from the car thief). You can sue the person responsible for damages.

Answer 4

Specifically in germany, you can't get a Zulassung (licence to drive it on public roads) for your car without insurance. There's better tiers, but the lowest tier is "damages to others are insured". So that insurance will pay for any damages you, your friend or even a car thief do to others (see e.g. here for a quote on the stolen car case).

The other question is whether your insurance will then demand money from you. When you got that insurance, you had to tell them who will drive the car - anyone? just you and your spouse? how young is the youngest, how old is the oldest driver? Depending on these things, your premium might have been higher (everyone, from 18 to 100+!) or lower (just me and my spouse, both 35 years old). If you let your friend drive after telling your insurance that you would not, they will point at the contract and say "now you owe us X money. Pay up."

Also, the premium will go up if you or someone you gave the car keys to crashes it and the insurance has to pay for the damages. If a car thief crashes your car, the premiums will not go up - but don't go claiming your friend stole the car now, or he will get in trouble with the police, the insurance will try to get the money it paid back from him, and you will have one less friend.

Answer 5

Your insurance certificate or policy document should tell you exactly who is covered and what cars.

ireland

My insurance certificate states that I am covered to drive the car with the specified registration and so is my wife. It also states that I am covered to drive another car not owned by me with the permission of the owner.

So to translate that to your example, your friend would have to have similar insurance, and it is their insurance that would cover the claim.

Note that I only got the "drive other cars" coverage after I turned 25 - prior to that it only covered me to drive the specified car.

Answer 6

australia

Personal injury insurance

All states and territories have compulsory third-party injury insurance (CTP) that is required in order to register a motor vehicle. In New South Wales, Northern Territory, South Australia, Tasmania and Victoria this is a no-fault scheme. The other states have traditional adversarial insurance but the Commonwealth is encouraging all states to adopt a no-fault scheme.

Third party property or comprehensive insurance

These are optional and subject to the terms and conditions of the policy.

In general, they attach to the vehicle and cover all licensed drivers. You generally nominate the “regular” drivers and pay higher premiums if they are young, however, the policy does cover occasional use by non-nominated drivers perhaps with a higher excess (deductible). They will also pay if the car is involved in a collision while stolen and then the insurer will seek damages from the driver.

Motor insurance companies in Australia operate on a “knock-for-knock” basis meaning they don’t sue each other to determine fault. If two insured cars collide, each insurer pays for the damage to the vehicle they insure - overall it’s cheaper then engaging lawyers and going to court. This isn’t a law, it’s just industry practice.

Answer 7

germany

Let's only consider the liability here.

1. Car liability insurance in Germany is mandatory.¹

   Without this insurance, you cannot register the vehicle in Germany.

2. The car is insured, not the driver.¹

   Motor vehicle third-party liability insurance will provide coverage when an insured vehicle causes death or injury to persons, damages or destroys property, or causes financial losses.

3. Customers who never claim damages enjoy cumulative rebates over the years which are typically revoked after an accident from which a liability arose.² This provides an incentive to pay modest damage out-of-pocket. As an example, after a friend caused an accident, the owner's insurance payed for the damage but then revoked the rebates.

   Rund 1920 Euro Mehr­betrag für die nächsten 26 Jahre rechnete der Versicherer dem Halter aus. (The insurance representative computed the accumulated surplus rates [due to the revoked rebates] as 1920 Euros.)

4. The quoted article is actually about a quirky clause in some (additional, non-mandatory) private liability insurance contracts: They may cover the "surplus car insurance premium" damage the owner of the car must pay after the rebates are revoked.² That is somewhat unusual because normally damage to the insurance taker is obviously not within the scope of a liability insurance which covers damage to others. But probably the increased premiums can be seen as a liability which is an indirect fallout from the damage to the other car... or it is just a funny clause that's almost never invoked but makes some people sign a premium insurance with "premium premiums".

Sources:

1. Bundesanstalt für Finanzdienstleistungsaufsicht, the federal administrative body tasked with "supervision of banks and financial services providers, insurance undertakings and securities trading".
2. An article from Stiftung Warentest, the German "Consumer Reports" equivalent.

Answer 8

Depends what you insure and where. "Under your name" is ambiguous and has no agreed meaning so lets just assume that you are the one that paid the premium and work from there.

If you insure the vehicle itself (often called "open cover") then third parties will be compensated for the damage the vehicle does to them, as long as certain conditions are met. This is the equivalent of public liability and is common in commercial vehicles. Your friend might or might not be protected for damage they do to others in your car, depending on the details and conditions of the specific insurance policy you bought.

If you insure yourself in your vehicle for harm you do to others (third party liability) then it would be very unusual for your friend to be covered.

If you insure yourself in your vehicle for harm done to others, and against harm your vehicle might receive (comprehensive cover) then there is usually a clause that others driving your car, with your permission, are covered to the legal minimum of third party only. Again, terms and conditions apply and it would be unusual for your friend to be covered for damage to your car.

Answer 9

Germany:

For your damages:

It's an option you can choose in the insurance. There are insurances that won't cover this and others that will. It's simply an option that costs extra money.

For damages of others involved in the accident:

They'll pay but the insurance policy may specify a (financial) punishment to you.