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Liability of motor vehicle insurers

Monday, January 20, 2014
Law Made Simple

Insurance companies are not liable in the event of an accident caused by a driver of a vehicle who is not named or specified on the insurance policy. 



This is so even if the driver has the consent of the person insured to drive the vehicle. Where an insurance policy is limited to cover only the policyholder or any other named driver, the insurer is liable only for those persons named on the policy. The insurer is not bound to deal with any claims or pay any compensation arising out of a road traffic accident caused by an unnamed or uninsured driver. 



 This is the effect of the 2012 Privy Council decision in the case of Presidential Insurance Company Limited v Resha St Hill.



The case involved the interpretation of Section 4(7) of the Motor Vehicle Insurance Act (as amended) which provides that “…a person issuing a policy of insurance under this section shall be liable to indemnify the person insured or persons driving or using the vehicle…with the consent of the person insured specified in the policy in respect of any liability which the policy purports to cover in the case of those persons.” 


As a vehicle owner or policyholder, you should not allow another person to drive or use your vehicle unless you are certain the policy allows for other unnamed drivers to be insured while driving or being in control of the vehicle. 



Generally, the majority of motor vehicle insurance policies cover the insured and anyone driving the vehicle with his or her consent although many contain a provision that excludes people who are under the age of 25 or with less than two years driving experience. Ask your insurance agent if this clause is included in your policy and the conditions of the clause. Separate coverage can be obtained for these individuals. 


As a driver, you should not drive or use another person’s vehicle unless you are a named driver on the policy or the policy expressly covers other or unnamed drivers since the law does not impose any liability on insurers to pay compensation if an accident occurs and you are not an authorised driver on the policy. You risk being guilty of driving without insurance and you will be responsible for all losses suffered by the injured persons or any damage done to their property. 


If you have been involved in a road traffic accident with an uninsured driver, please note the insurers are not required to cover any claim for personal injuries or losses you suffer as a result. However, a civil action can be pursued against the uninsured driver personally. 



• This column is not legal advice. If you have a legal problem, you should consult a legal adviser. Co-ordinator: Roshan Ramcharitar


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