This is a scenario that several parents have experienced. A former colleague of mine was on a hunting trip when his son took the car and a few friends on a pleasure drive. They crashed the car and tragically one of the passengers died in the accident. This presents several legal questions – but for the purposes of this blog we would like to focus on the car insurance cover and financial consequences!
There is not a straightforward answer to this question – and it might be best to refer to a specific example which was dealt with by the Ombudsman for Short Term Insurance. This was appropriately titled “Parent’s nightmare”.
On the morning of 21st April 2005, the Insured’s wife woke up at 6.00 a.m. and discovered that her son was not in his bed and that their car and the car keys were missing. The Insured was woken up and he then started making phone calls and eventually went to the nearest Police Station. Whilst there, he was informed that his son had taken the car during the night whilst his parents were sleeping and had a collision at 3.30 a.m. Because the son was afraid of his father, he did not wish his parents to be informed.
The Insurer rejected the claim based on an exclusion in the Policy that there is no cover should the vehicle be driven by an unlicensed driver.
It was pointed out to the Insurer that as the use of the vehicle by the son was unauthorised and without any knowledge or consent of the parents, the exclusion would not apply. The Insurer conceded and settled the claim in the amount of R110 900,00.
[Source: Ombudsman Newsletter: 03/05]
It is important not to merely accept this example as the basis for argument that insurers will always pay for damages to such a vehicle. We need to focus on the “Unauthorised use” of the vehicle. The policyholder in this factual scenario could rely on facts such as the time of collision, the fact that the policyholder was not aware of the usage etc.
The insurer will not merely accept an allegation of unauthorized usage. The investigators appointed by the insurer will seek to find confirmation of the prior history of vehicle usage. If there is reason to believe that the parent was aware that his vehicle is used by the child and the child has previously been spotted driving the vehicle -the claim will be dismissed! This question can only be answered after all the facts in the specific scenario have been taken into account!