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A owns a car that is ready for driving on the street. X steals the car and through reckless driving causes $30,000 damage to B’s car. Normally A would have third party liability insurance which pays for B’s damage and tries to recover the damage from X. But A has no third party liability insurance which is illegal.

Does B have to sue X (whose fault it is that there is damage) or can they sue A whose criminal fault it is that B is not covered by any insurance? Or does B have to sue both? What if X has no money but A does? Assume the facts are not in doubt. Interested in USA, UK, Germany.

gnasher729
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3 Answers3

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X had a private law duty to drive reasonably. X breached that duty and caused damages to B's car as a result. B has a claim against X. Normally, B's insurer will take care of B, and also sue X on a subrogated claim to recover the damages.

Absent a contract, A has no private law duty to anyone to carry insurance. Instead, this is a public duty, imposed and enforced by the criminal or regulatory law. The lack of a private law duty is enough to prevent a claim against A.

But additionally, A's failure to insure their vehicle did not even cause the damages to property — X caused that. A's failure only possibly has resulted in pure economic loss. Pure economic loss is normally not recoverable, and the circumstances in your hypothetical do not bring B's claim against A into any exception to that principle.

Also, you say:

A would have third party liability insurance which pays for B’s damage

That isn't quite right. A's insurer promises to A to cover A's liabilities. A's insurer only cares about B's damage to the extent that A is liable for it.

Jen
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In United Kingdom there is a scheme to recompense victims of uninsured drivers.

UK Government website states:

Compensation for victims of uninsured or hit and run drivers

You may be able to claim compensation from the Motor Insurers’ Bureau (MIB) if you’ve been injured or your property has been damaged because of an uninsured or ‘hit and run’ driver.

Weather Vane
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Third-party property damage insurance is not compulsory; A can choose to carry it or not as they like. Third party injury cover is compulsory and is a prerequisite before a motor vehicle can be registered; this is a no-fault system. In cases where injury is caused by an uninsured vehicle, the ‘nominal defendant’ is held liable (i.e. the government itself) who can then recover from the responsible person.

A is only liable for X’s negligence is X is A’s agent. Typically where X is an employee of A or is performing some errand in the vehicle for A’s benefit.

B has to sue X.

Dale M
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