Certain car insurance policies provide cover if you injure someone else or damage their property, but this often excludes damage caused to your own property. Read this guide to learn about legal liability cover.
Legal liability in car insurance policies provides cover if you accidentally cause loss to another person’s property while driving.
The insurer will pay to defend the matter, including legal costs, up to a claim limit.
Legal liability cover generally excludes damage to your own property.
This means if you have a car accident where you damage another car you own, or damage part of your house, the damage will not be covered under the legal liability policy provisions.
Mr and Mrs P’s* driveway drama
Mr and Mrs P made a claim on their car policy after Mrs P accidentally scraped the undercarriage of their car and it leaked a large amount of oil on the driveway. The insurer accepted the claim for the damage to the car and arranged repairs. However, it said it a claim needed to be made under the house insurance policy (with an excess paid) for the damage to the driveway. Mr P said the driveway damage should be accepted under the liability cover provided by the car policy. The IFSO Scheme confirmed that Mrs P was not legally liable for the damage to the driveway and they needed to make a claim under their house policy.
*Names have been changed
Generally, car insurance legal liability provides cover while you are driving. This means you are covered when you are driving your insured car, or another car.
Suppose another insured person has caused damage to property you both own. In that case, the exclusion for damage caused to the insured’s own property will apply.
Third-party car insurance provides cover for the insured person’s legal liability. However, this will generally include the same provision as in other car insurance policies that excludes damage to the insured’s own property.
If you damage your house or property while driving your car (e.g. reversing into your fence/wall), this damage should be covered under your house policy. You may need to make two claims and pay two excesses:
If you damage a second car you own while driving your car (e.g. while parking in the garage), you may need to make two claims and pay two excesses for the damage to each vehicle.
Read your policy
Read your car policy to understand the legal liability cover that applies and any exclusions.
Ensure you have appropriate cover for your needs
Talk to your insurer to make sure all the property you would like covered is included within the insurance policies you hold. Your insurer will let you know the options available in your specific circumstances.
Ask questions if you are unsure about what property is covered under your policy
If you are unsure about how the legal liability cover applies to your circumstances, ask your insurer for more information. Your insurer can answer any questions you have about the scope of the cover and any exclusions.