Q&As

As regards vehicle insurance, if a friend borrows a policyholder's vehicle and causes loss, would that exempt the policyholder's insurers? In matters concerning insurer liability generally, where the vehicle has been sold, or stolen, but valid insurance is in place at the date of collision, would the insurers be exempt from liability and if so, on what grounds?

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Published on LexisPSL on 14/05/2018

The following PI & Clinical Negligence Q&A provides comprehensive and up to date legal information covering:

  • As regards vehicle insurance, if a friend borrows a policyholder's vehicle and causes loss, would that exempt the policyholder's insurers? In matters concerning insurer liability generally, where the vehicle has been sold, or stolen, but valid insurance is in place at the date of collision, would the insurers be exempt from liability and if so, on what grounds?

In the majority of personal injury claims a motor insurer will provide a full indemnity to their insured under a valid policy of insurance. This means that the insurer will accept a contractual liability to pay all damages that fall on the defendant.

However, if there is a breach of the policy (either before or after the event) by the insured, the insurer is able to contractually avoid liability to their insured. In that instance the claim is likely to be dealt with by:

  1. the Road Traffic Act insurer—a motor insurer has certain obligations to satisfy judgments obtained by an innocent third party even if there have been breaches of the insurance policy by the insured, failing which

  2. the Article 75 insurer—by an agreement between the Motor Insurers’ Bureau (

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