You lent your car and your friend caused damage: whose bonus suffers?

The story is familiar: a friend, a brother-in-law or your adult child borrows the car for an afternoon, has a minor bump in a car park, nobody is hurt, and the damage to the other car is settled under compulsory motor third-party liability insurance (MTPL). Then the renewal notice shows a bonus-malus class two steps worse – on your policy. “But I wasn't even driving!” As a broker, I hear this sentence often, and the answer follows not from an everyday sense of fairness but from the logic of MTPL: the policy and the claims history belong not to the driver but to the registered keeper. This article goes through who bears what – with a lent car, a hire car and car sharing.

MTPL is tied to the registered keeper, not the driver

Under the MTPL Act (Gfbt.), MTPL is taken out by the vehicle's registered keeper (üzemben tartó), and the insurance covers damage caused by the vehicle's registered keeper and by whoever is driving it at the time – so your friend is insured as the driver, and the injured party receives compensation from the MTPL policy. This is the virtue of the system: the not-at-fault injured party does not have to think about who was behind the wheel. Bonus-malus follows the same logic. Section 3(1) of Decree 21/2011 of the Ministry for National Economy (NGM) states, word for word, that the advantages and disadvantages of the system “are attached to the person of the registered keeper who is the policyholder, regardless of who drove the registered keeper's vehicle”. The central claims-history register records the claim against your policy; your friend's class – if they have their own car and policy – remains unchanged. How far down the ladder the claim takes you is shown in the article on how a claim affects your bonus: according to the decree's table, one paid claim typically means dropping back two classes.

What you can do for your class: repayment within 45 days

Section 7 of the decree offers a clean way out: the registered keeper is entitled to pay the full amount of the compensation to the insurer within 45 days of the insurer's written notice of the full amount of compensation – and if they do so, the class must be determined “as if no obligation to pay compensation had arisen on the part of the insurer”. For a minor bump, this is often the sensible route; for a larger claim, several years' worth of premium difference must be weighed against the amount to be repaid. Who ultimately foots the bill – you or your friend – is a matter of agreement between the two of you; towards the insurer, the registered keeper pays. If your policy has a bonus-protection-type add-on, check its policy conditions too: the article on the bonus-protection add-on sets out factually what it does and does not do.

When the insurer turns to the driver: the cases of recourse

In certain cases, the insurer can recover the amount paid to the injured party under Section 34 of the Gfbt. – this is recourse (regressz), explained in detail in the article on recourse. The cases and amount limits set by the law:

• The full amount from a driver who drove the vehicle without the permission of the registered keeper or the authorised user – so properly lending the car does not fall into this category – and in the case of damage caused unlawfully and intentionally.
• Up to HUF 5 million if the driver was driving under the influence of alcohol or of a substance that impairs driving ability – and also from anyone who let a person in such a state drive – and in the case of failure to render assistance.
• Up to HUF 1.5 million if the driver did not hold a licence entitling them to drive the vehicle, or from the registered keeper if the vehicle was in a seriously neglected technical condition.
• Up to HUF 500,000 for a non-intentional breach of the duty to disclose information or to report the claim.

Recourse is the insurer's claim, so it is the insurer that must prove the conditions for it. Two lessons from the lender's point of view: make sure that the person you hand the keys to has a valid driving licence and is sober, because you too may be liable for letting them drive; and the claim must be reported in writing within 5 working days on the at-fault party's policy – that is, yours – as described in the article on reporting a claim as the at-fault party. You make this report as the policyholder, attaching your friend's details and statement.

Hire cars and car sharing: the roles are different

With a hire car, the registered keeper is the rental company, the MTPL policy is theirs, and it is their insurer that is liable towards the injured party; your own MTPL policy and bonus are not affected, because you are not the registered keeper of the hired vehicle. Towards the rental company, however, you are liable under the rental agreement and its general terms and conditions: for damage to the hired car itself, what typically applies is the rental company's casco (comprehensive motor insurance) and the deductible set in it, a deduction from the deposit and, in some cases, a claims-handling fee – it is worth reading these before hiring, because they differ from company to company. Car sharing follows the same logic: the operator's fleet policy covers damage caused to third parties, the user is liable up to the deductible in the general terms and conditions, and the damage must be reported in the app. With long-term rental or leasing, you may be entered in the registration certificate as the registered keeper – in that case, the MTPL policy and the bonus are also yours.

Settling up with your friend: what can you ask for?

MTPL settles the injured party's loss, not yours. What remains with you: the repair of your own car if you have no casco, the casco deductible if you do, and the loss of bonus – the higher premium in the following years – or the claim amount repaid within 45 days. Under Section 6:519 of the Hungarian Civil Code (Ptk.), anyone who unlawfully causes damage to another must compensate for it – so in principle these items can be claimed from your friend if the damage was caused by their fault. In practice, this is a matter of agreement: the premium difference can be worked out from the renewal notices, and the repair cost can be documented with an invoice. In a dispute, civil law and the courts provide the framework – it is rarely worth getting that far, which is why a single sentence before lending the car is worth the most: “if there is damage, how will we split it?”

What to do in practice. Before lending the car: driving licence, sobriety, and one frank sentence about what happens if there is damage. After the damage: report it to your own insurer within 5 working days, with your friend's statement. After the notice of the insurer's payment: 45 days to decide whether to repay the claim. If you are unsure what the downgrade means for your policy, I can help you go through the renewal notice and the effect on your class – reporting the claim and repaying it are your decision and require your signature; I act on the client's behalf (as their agent, not the insurer's).

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Sources

• NGM Decree 21/2011 (VI. 10.) Section 3(1), Section 7 – bonus-malus belongs to the registered keeper, 45-day claim repayment
• Text of NGM Decree 21/2011 – as in force on 15 March 2014 (published by Allianz, PDF; the current text is available at the legal database link above)
• MTPL Act (Gfbt., Act LXII of 2009) Section 34 – the insurer's right of recovery
• Economx – Cases in which the MTPL insurer can reclaim the compensation paid (amount limits under Gfbt. Section 34)
• Hungarian Civil Code (Ptk., Act V of 2013) Section 6:519 – general liability for damages

Related articles

• An At-Fault Claim: What Happens to Your Class, and What Can You Do?
• Recourse: when can the insurer reclaim what it paid out?
• Two Cars, Two Policies: How Does the Bonus Work?