Joey, the third-party claimant, was involved in an accident with the insured driver, Amy, where she was found to be at fault. Joey subsequently submitted a claim for loss of use of the vehicle, also known as Compensation for Assessed Repair Time (CART).

However, the insurer rejected the claim because Amy did not have a valid driving licence at the time of the accident. The insurer stated that this breach of policy conditions by their insured driver entitled them to deny liability to the third-party claimant or any other claims arising from the accident.

FINDINGS

The insurer submitted the police summons as evidence that Amy did not possess a valid driving licence at the time of the accident.

The insurer has referred to the following provision:

Section D: General Exceptions

Unlicensed Drivers
There is no cover under this Policy if You or Your Authorised Driver do not have a valid driving licence to drive Your Car. This will not apply if You or Your Authorised Driver have an expired licence but are not disqualified from holding or obtaining such driving licence under any existing laws, by-laws and regulations.”

Section 26 of the Road Transport Act 1987 (RTA) sets out the regulations relating to driving licences as follows:

“(1)Except as otherwise provided in this Act, no person shall drive a motor vehicle of any class or description, on a road unless he is the holder of a driving license authorizing him to drive a motor vehicle of that class or description, and no person shall employ or permit another person to drive a motor vehicle on the road unless the person so employed or permitted to drive is the holder of such a driving license.

(2)Any person who contravenes subsection (1) shall be guilty of an offence and shall on conviction be liable to a fine of not less than three hundred ringgit and not more than two thousand ringgit or to imprisonment for a term not exceeding three months or to both.”

OUTCOME

The Ombudsman adjudicated the case in favour of the insurer. The insured driver was found to be driving without a valid licence, which constitutes a breach of the policy conditions. As a result, the insurer is entitled to deny the third-party claim.

Nevertheless, Joey still has a direct legal avenue and may pursue compensation by filing a personal action against Amy.