united-kingdom
When does third party liability not pay?
<p>Under which circumstances will a car's third party liability insurance not pay the damage to a third party in the UK? Not asking when the insurance company will ask the driver for their money back, but when they are not going to pay? </p>

<p>I couldn't find anything through Google. AFAIK for example the German rules are that the insurance doesn't pay if the car was not insured, if the damage was caused intentionally, and as far as the damage exceeds the insurance coverage, but has to pay in all other cases. </p>

<p>Because this was asked in a comment: The German insurance doesn't pay to third parties if the car isn't insured anymore, which happens after several payments are missed; they will also inform the police that there is an uninsured car. The policy doesn't matter, whether they have to pay to third parties is governed by law. They have to pay in case of negligence, gross negligence, but not for intentional damage. Since "third party liability insurance" is a legal requirement in many countries, intended to protect innocent third parties, you wouldn't expect the insurance policy to matter. </p>

<p>The British system of motor insurance is not the same as the German system, at least as you describe it. The law that applies is <a href="http://www.legislation.gov.uk/ukpga/1988/52/section/143" rel="nofollow noreferrer">Section 143 of the Road Traffic Act</a>, which specifies that "a person must not use a motor vehicle...unless there is in force...a policy of insurance that complies with the requirements of this Part of this Act" (unless you provide your own third party insurance by depositing a large sum with the Court Funds Office: I do not believe this has ever been done).</p>

<p>So what the insurance company will cover depends on the policy provisions, providing that the policy is inclusive enough to meet the standards set out in the Act. As a matter of general agreement any large company will usually cover most expenses and seek to recover from the driver any payout they were arguably not required to make (such as where you provided false information); that is another (huge) question entirely, in which you say you are not interested here.</p>

<p>As an example, my car insurance will cover all damage caused to third parties where I or somebody named in the policy was driving unless (i) there is other insurance covering the same liability (ii) the victim was working with or for me (iii) acts of terrorism or (iv) liability caused by cutting, welding or use of blowtorches.  (Note that all these exceptions do have legal definitions, either in the small print or in legislation. It may also be important that this is a comprehensive policy from which I have quoted only the relevant provisions; 'third-party only' policies are available but are, as a deliberate choice by the insurance companies, more expensive than comprehensive.)  So whether my hitting a pedestrian was deliberate or accidental will not affect the insurance payout; but if he was hit by somebody who stole my car, I have neither insurance nor liability.</p>

<p>Legally, the at fault driver must pay the damaged party for their negligence, recklessness or criminal behaviour. The insurance company <strong>indemnifies</strong> the at fault driver in the circumstances described in the insurance contract.</p>

<p>If you are the person seeking redress it may <em>seem</em> that you are getting it from the insurance company: you aren't. The insurance company is acting for the at fault driver - were you to initiate legal action you would sue the driver, not the insurer.</p>
