A family member drove my car without my knowledge and had no insurance or licence - now there's an insurance claim against her?

About 10 months ago a family member drove my car without my knowledge and had no licence or insurance. They were arrested by the police for being over the legal alcohol limit. They were charged in court and pled quilty and were sentenced.

I have now received a letter from my insurance saying that a third party is claiming against my policy as my family member reversed into them. I initially denied any knowledge of the accident as the date quoted and locality did not tie up with my family member driving the vehicle. I replied to the insurance saying that the vehicle was at my property all day and I had the keys. However, they have responded saying that the date and location were incorrect and are now saying it was on the day my family member drove. She denies being involved in an accident and there was no damage to my car but I obviously cannot prove she wasn't involved.

I am unsure how to proceed. At the time, my family member was dealing with alcohol dependency and mental health issues but she is now in recovery. I do not want to do anything that will send her back to court as I am worried that the stress may make her relapse. However, I do not really want to pay for the costs of repair of the third party's vehicle when I was not involved in the accident.

Can anyone suggest my best course of action? The insurance company have sent me a form to sign to authorise them to deal with the claim and agreeing to repay the costs. The letter also states that if I do not sign the form, the third party could start legal action against either me or my family member.

Asked on 21 February 2020 by Ernie

Answered by Tim Kelly
Empathy plays little part in law. For your insurance to cover the claim, you must report your family member for "taking the vehicle without consent", otherwise you can be prosecuted for allowing an uninsured driver to be in control your vehicle. If, as you have stated, they were arrested and this has already been done then you need to sign the form consenting to them paying the cost, or you will be liable.

Your family member either needs to pay for the cost from the other parties claim, or you do. If you do not want to put your hand in your own pocket, that leaves you with allowing your insurer to deal with it, though that may lead to you possibly having to report the family member for theft. Under the Road Traffic Act, your insurer is always liable, however, they do have the legal right to seek recovery of these losses if in breach of contract.

It is up to the third party to prove the incident happened, rather than for you to disprove. I would be requesting from them what evidence they will be seeking to rely on in court (which they are duty-bound under the Civil Procedure Regulations) to share prior to attending court. I would be wanting CCTV footage, witness, ect...before doing the above.
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