Motor

Claim case sharing

Drunk driving

Scenario:
Mr. Shek, an insured driver, was driving along a road and was approaching a bus stop. Suddenly, a child who intended to catch the bus dashed out from the opposite side of the road towards the rear of the bus. Unable to stop the car in time, Mr. Shek knocked the child down and also crashed into the bus. The child was admitted to the hospital. The bus and the insured car were damaged. Mr. Shek took a post-accident breathalyzer test and the result exceeded the prescribed limit. Though he was not charged for any driving offence, he was convicted of drunk driving. The injured child and the bus company demanded compensation.

In this scenario, should Mr. Shek bear all the responsibilities or should the insurance company settle the claims for a) the injured child; b) third party property damage (i.e. the bus); and c) Mr. Shek's own car damage?

Answer:
As Mr. Shek was convicted of drunk driving, under the policy exclusions, it would not be the insurance company, but Mr. Shek to bear all liabilities arising out of the accident. However, the accident involved third party bodily injury. Under the Insurers' Concerned Principle of The Domestic Agreement issued by the Motor Insurers' Bureau of Hong Kong (MIB), the insurance company would run a risk of being liable for not properly defending the bodily injury claim.

Therefore, the insurance company would take over the conduct of proceedings on a "without prejudice" basis for the insured. In this way, the insurer could properly handle any possible proceedings with the assistance of the insured. After the third party bodily injury claim was settled by the insurer, the compensation made to the third party would be recovered from Mr. Shek, who was also liable for the bus damage claim. The insurer was also not liable for Mr. Shek's own damage.

As long as the accident is caused by the insured driver's negligence, he or she is still held liable for third party bodily injury regardless of the insurance cover. Even worse, the insured's own bodily injury and property damage as well as the third party's property damage will not be covered by the insurer. Therefore, it is important to always practise safe driving. 

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