The employee's spouse drove the fleet car home; the warehouse worker lent the van to the driver of the company next door; a worker from the subcontractor brought in for the project got behind the wheel; the employee's eighteen-year-old son “just popped” to the shop in it. In every one of these cases, the same question comes up when there is a claim: does casco (comprehensive motor insurance) pay if the person driving was not the one the company had in mind? As a broker, I see that SMEs do not settle the question of “who may drive” before the keys are handed over, whereas in a claim the policy conditions tie several rules to the identity of the driver. The answer is rarely a simple yes or no: it depends on whether the situation falls under an exclusion or a ground for exemption of the insurer, and these two are not the same thing. The general questions of private use are discussed in the article on mixed use; this piece is specifically about who is driving.
- Casco pays the owner or registered keeper of the vehicle; the driver is not an insured but a “person lawfully driving the vehicle” – who was driving matters through an exclusion or a ground for exemption, and the two are not the same.
- Under Section 6:464 of the Hungarian Civil Code (Ptk.), the insurer is released from paying if it proves that the damage was caused intentionally or with gross negligence by the policyholder, the insured, a relative living in the same household as them, or an employee or agent of theirs specified in the policy conditions; Hungarian policy conditions count driving without a licence and drink-driving among these cases.
- If a family member or partner drives with permission, casco typically pays; a vehicle taken without permission is a question of theft cover, where key management is decisive – and in MTPL (compulsory motor third-party liability insurance), Section 34 of the MTPL Act (Gfbt.) allows the insurer to claim back the compensation paid from the driver who drove without permission.
Whose cover is it? The company's, not the driver's
Casco is property insurance: the insured is the owner of the vehicle or the keeper entered in the vehicle registration certificate, or anyone else with an interest in avoiding the insured event – this is how one Hungarian fleet casco condition puts it – and the insured owner is entitled to the insurance payment. The driver is not an insured but “the person lawfully driving the vehicle”; the cover is attached not to them personally but to the vehicle. This leads to the basic rule: casco pays the company for the damage to the vehicle regardless of who was behind the wheel – unless an exclusion or a ground for exemption applies because of who was driving. In compulsory motor third-party liability insurance (MTPL), it works the other way round: there, under the MTPL Act (Gfbt.), the driver of the vehicle is also insured alongside the keeper; the insurer pays the injured party and then, in the cases listed in Section 34 of the Act – for example driving without the keeper's permission, drink-driving or driving without a licence – it can claim back the amount paid from the driver and, in certain cases, from the keeper.
Exclusion or exemption: two different gates
An exclusion means that the event is not an insured event in the first place – in Hungarian policy conditions this typically covers damage occurring during a race or while preparing for one, a vehicle rented out for less than a year or operated as a taxi, or theft where the company has placed the vehicle in someone else's possession (loan, hire) and the person lawfully in possession of it in this way embezzles it. With an exclusion, fault is not examined: the question is whether, under the wording of the conditions, the situation falls within the cover at all. Exemption is different: the event is an insured event, but the insurer is released from paying if it proves that the damage was caused unlawfully, intentionally or with gross negligence by the group of persons specified in Section 6:464 of the Hungarian Civil Code (Ptk.) – the policyholder, the insured, a relative living in the same household as them, or an employee, member or agent in a position specified in the general terms and conditions, and, where the insured is a legal person, an executive officer specified in the conditions and a member, employee or agent authorised to handle the vehicle. Fleet casco conditions typically name this group as the policyholder and the insured, a relative living in the same household as them, the employee and the agent, and list what they regard as grossly negligent: the person lawfully driving the vehicle not holding a valid driving licence of the appropriate category, driving under the influence of alcohol or another substance affecting the ability to drive, neglected technical condition, improper use, and a vehicle left unlocked. The burden of proof is on the insurer – this is required by the rule in the Ptk. Whether a given situation is an exclusion or an exemption has to be checked in your own conditions: it varies from insurer to insurer.
Three typical situations
A family member drives, with private use permitted. If the company has permitted private use and driving by family members, the spouse is a person lawfully driving the vehicle: under Hungarian policy conditions, casco typically pays if they held a valid driving licence, were not driving under the influence of alcohol and did not cause the damage intentionally – a traffic offence (a missed right of way, careless reversing) is not in itself a ground for exemption, as an expert answer from a broker also puts it. If the internal rules prohibited family members from driving, this is typically not an exclusion as far as the insurer is concerned – whether the conditions attach any consequence to the concept of “lawfully driving” varies from insurer to insurer – but primarily a matter between the company and the employee. One exception is worth bearing in mind: fleet casco conditions typically link the grounds for exemption – no driving licence, drink-driving – to the conduct of the person lawfully driving the vehicle, regardless of whether an employee or a family member is behind the wheel; the Ptk.'s wording “relative living in the same household” does not cover the employee's spouse where the policyholder is a company, but it does apply where the keeper is a sole trader. Grossly negligent driving by the spouse can therefore lead to exemption in the same way as grossly negligent driving by the employee.
A subcontractor, a partner firm's driver, a vehicle on loan. Anyone who drives with the company's permission is driving lawfully – for accident damage, casco typically pays in the same way as for your own employee. The risk lies elsewhere: if the company charges for the use, it comes close to the rental exclusion; if the person lawfully in possession of a lent vehicle does not bring it back, under Hungarian policy conditions this is typically embezzlement, which theft cover does not extend to; and without a handover record, the condition of the vehicle is difficult to prove after the event. Before handing a vehicle over to a subcontractor, it is therefore worth recording in writing the purpose and period of use, the identity of the driver and their driving licence – and clarifying what the subcontractor's own liability insurance covers of any damage caused to the company's vehicle.
A vehicle taken without permission. The employee's son who takes the key from the counter; the former colleague who did not hand back the spare key. This is not lawful use but unauthorised taking: it may fall under casco's theft cover, but there the rules on handling keys and documents are decisive – if the key was accessible to an unauthorised person, the insurer may be released from paying under the conditions; the conditions reviewed expressly require keys to be stored locked away. In MTPL, Section 34(1)(a) of the Gfbt. allows the insurer to claim back the amount paid to the injured party from the driver who drove the vehicle without the keeper's permission – with no upper limit. The rules on theft are set out in detail in the article on theft losses.
Licence and breathalyser: grounds for exemption tied to the driver
Two grounds for exemption appear in almost all Hungarian policy conditions: not holding a valid driving licence (expired, withdrawn, wrong category) and driving under the influence of alcohol or drugs. Both apply to the person lawfully driving the vehicle – and so to your own employees, too – and in both cases it is the company that can do most: through documented driving licence checks and a written ban on alcohol. This also matters on the MTPL side: under Section 34 of the Gfbt., where a vehicle has been handed over to a driver without a licence or under the influence of alcohol, the insurer can also claim back from the insured who handed over the driving, unless that person proves that they could not have recognised the driver's condition, or had good reason to assume that the driver held a licence. The company's defence therefore begins not with the claim but with the handover of the keys. The common reasons for claims being rejected are collected in the article on common reasons for rejection.
What should the company do?
Set down in writing who the permitted drivers are and the procedure for handing over the vehicle: who may drive, whether family members may drive, and what is required for a partner's or a subcontractor's worker to get behind the wheel. Check and document driving licences, keep the keys in order, and make sure a record is drawn up for every handover. These do not bind the insurer – the insurer pays only for what is an insured event under your contract – but they help you prove that the driver was driving lawfully and that the company did what could be expected of it. The article on the vehicle use policy goes through the six points worth setting down in the internal rules because of insurance. In a claim, the reporting route is the insurer's claims line or fleet portal; if the insurer indicates exemption on the grounds of who was driving and the case gets stuck, I help where I can – in interpreting the wording of the conditions and the burden of proof.
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Sources
- Hungarian Civil Code (Ptk.) – Act V of 2013, Section 6:464 (exemption of the insurer) (njt.hu)
- MTPL Act (Gfbt.) – Act LXII of 2009, Section 3 (insured persons), Section 34 (the insurer's right of recourse) (njt.hu)
- Alfa Biztosító – Fleet casco customer information and policy conditions (FLC-SZ-230801): insured, exclusions, exemptions, loss-prevention obligation
- CLB – A company car was driven by someone other than the employee, who crashed it: does casco pay? (expert answer)
