Third party insurance does not cover non driving policy holders

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Third party insurance does not cover non driving policy holders
Monday, October 03, 2011

The Supreme Court of Cyprus has issued its long awaited decision in the matter of Stavroula Photopoulou and others v Minerva Insurance Company Limited, vindicating the position put forward by the appellant insurance company in connection with the interpretation of Cyprus automotive third party compulsory insurance legislation.

The circumstances of the case involved a policy holder who happened not to drive the vehicle involved in the accident but just travelling in the said vehicle as a passenger. The said policy holder was fatally injured and his heirs and estate administrator sued the driver on the basis of negligence and obtained judgment against him. Subsequently, the claimants requested the insurance company, Minerva, to satisfy this judgment, however Minerva denied that it had a duty to satisfy this judgment under applicable law.

The Supreme Court ruled that although insurance companies are liable to cover a policy holder against damage to persons or to property of third parties that result from the policy holders’ negligence, nevertheless the insurance companies are not liable to compensate the policy holder himself (or his estate) if such person is not driving the vehicle and suffers damage as a result of the negligence of the driver of such vehicle. Such person cannot be considered as a “third party” in the meaning of applicable law. Relying on English law precedents, the Supreme Court resolved that the term «any person» should surely receive its ordinary meaning of any member of the public. The policyholder himself cannot come within the terms, not because he is not a person but because the clause only relates to a claim by any person which the policyholder is legally liable to pay and such a liability cannot exist on a supposed claim at the same time by and against himself.

The decision issued on July 13, 2011 has now clearly set the rule that Article 14 of Automotive Vehicles (Third Party Insurance) Law of 2000 does not apply where the compensation liability accrues in respect of death, injury or damage in the property of the insured, since such person cannot be considered a “third party” within the meaning of the law.

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