Insurance in Halachah [1]

The question arises when a person is harmed by a tortfeasor who is insured with insurance that pays for all damages, including indirect damages (grama) and all kinds of damages for which one is exempt according to the Torah. Now, when the injured party files a claim with the insurance company, the company seeks from the tortfeasor everything that can be claimed according to the rules of insurance law. This causes the tortfeasor a loss: payment of the deductible, as is customary in most cases, and an increase in the value of the premium he pays each year. Consequently, it must be discussed whether it is permitted to claim from the insurance company when this causes a loss to the tortfeasor.

The various types of insurance

It is common for a person, entity, or company to be insured, meaning that any damage for which they are held liable will be paid by the company. The most common and well-known case is vehicle damage, where a person is concerned that one driving a car may cause bodily injury or loss of life, and the payments are very high; therefore, he wishes to insure himself so that in the event of any damage, the insurance company will pay in his stead.

There are three main types of car insurance. There is “compulsory insurance” for a vehicle, which the law requires for every motor vehicle, including motorcycles and two-wheeled vehicles, and only a driver to whom the insurance applies may drive the vehicle. The purpose of compulsory insurance is to cover all bodily injuries of those involved in an accident: the driver, passengers, or pedestrians. Driving without valid compulsory insurance is a violation of the law and is considered a traffic offense in every respect; the punishment may include fines, license suspension, and even imprisonment. Beyond that, it exposes the driver to the risk of paying the cost of any bodily harm caused, and, Heaven forbid, if there are injured or fatalities, the compensation can reach especially high sums.

There is also the broadest insurance, known as “comprehensive insurance.” Although it is considered optional insurance, the broad coverage it provides has made it the option preferred by most drivers. It provides compensation in the event of a traffic accident that causes damage to the insured vehicle or to another vehicle; compensation in the event of damage to the vehicle due to theft, attempted break-in, fire, and the like; and it allows the addition of designated coverages for a variety of cases, such as a replacement vehicle in the event of theft or in the event of a total loss, roadside assistance and towing services, coverage for windshield replacement, and more.

There is another type of insurance for drivers who do not wish to purchase comprehensive insurance that would cover their own vehicle in the event it is damaged and the like [especially for low-value vehicles], but who still want to be covered in the event that their vehicle causes damage to another vehicle or to property belonging to someone else, beyond the compulsory insurance that covers only bodily injury. It also allows various basic coverages to be added upon request.

When an agreement is made with an insurance company, a contract called a policy is drawn up, containing the details of the relationship between the insurance company and the insured. The policy defines the insurance company’s obligation to pay monetary compensation for various damages that may be caused, and also includes all the obligations and rights of the company and of the insured, including the amount of the payment [the premium] that the insured will pay, the amount of compensation to be paid, the parties who will receive the compensation, the validity period of the policy, and the conditions for its existence. However, one must know that everything agreed upon with the agent must be written explicitly, and one should not rely solely on what he says.

The halachic concerns that may arise in an insurance claim

It is common in various types of insurance that there are cases of damage for which, according to Halachah in the laws of damages, there is no obligation to pay. This is most common with various obligations of grama—indirect causation—for which one is not obligated to pay according to Halachah, but is obligated according to civil law; or where it is considered damage of the category of bor, or any other exemption that may apply. This is especially common in traffic accidents, where according to Halachah the driver who caused the damage is not obligated to pay for it, such as in a case of grama and the like. The question is whether the injured party is permitted to claim from the insurance company to cover the damage, since according to Torah law there is no obligation for damages in this case.

A claim with the consent of the insured

In a case where the policyholder does not object to the claim, even though the insurance company is not liable under the Torah laws of damages, one might have argued that it is forbidden for him to claim his damages. But in truth it is obvious that he may claim, since the obligation of the insurance company is not based on the law of damage payments, but rather on the obligations in the policy agreement. There, the company undertakes to pay according to its own definitions in the insurance regulations. Accordingly, it is obvious that there is no impediment to claiming from them any payment whatsoever, since they are obligated by virtue of the agreement, which is an external obligation, and not by virtue of the laws of damage payments.

A claim that causes damage to the insured

It must be discussed in a case where the claim will cause damage to the insured, such as where, according to the agreement, he is obligated to pay a deductible, as is customary, or where the cost of the future premium will increase as a result of the claim. The question is whether a person is entitled to realize his monetary rights while causing damage to another.

Now HaRav HaGaon Rabbi Menachem Mendel Shafran shlita (Kovetz HaYashar VeHaTov, vol. 9) discusses whether one may claim from the insurance company in which the tortfeasor is insured in order to cover his damages, since the insurance also includes damages that one is not obligated to pay according to Torah law. For generally, a claim entails a loss for the tortfeasor: both because the insurance companies usually require the injured party to participate by paying a deductible, and because from then on the insurance payments [the premium cost] will be more expensive. From another angle as well, it must be discussed whether it is permitted to claim from the insurance, since according to insurance law, in order to claim from the insurance, one must first sue the insured and obligate him, and only after the insured has become obligated does he then claim his money from the insurance. If so, it must be discussed whether he is obligated to pay these damages.

However, a damages claim from an insurance company can occur in two ways. Sometimes the injured party claims from his own company, which undertook to cover his damages, and the company is the one that goes and sues the tortfeasor’s company. Seemingly this is permitted without question, for a person is not obligated to refrain from claiming what is due to him out of concern that the company will go and file a damages claim against another company improperly.

But sometimes the injured party sues the tortfeasor’s insurance company directly, since they undertook to cover the damages that the tortfeasor will cause. In such a case there is a question whether it is permitted to claim from the insurance company and cause damage to the tortfeasor. However, some maintain that since, when arranging the insurance, they undertake liability for all damages according to the rules of insurance law, the tortfeasor thereby obligated himself in all these matters even where he would otherwise not be obligated. The validity of this kinyan must be discussed, and this is not the place for it. There is more to elaborate regarding the parameters of insurance; see at length the article of HaGaon Rabbi Avraham Rosin (MiBei Dina, 5781), who discusses many other cases concerning the definition of insurance.

A claim from insurance when the tortfeasor is not insured

In a case where the tortfeasor is not insured, and the injured party’s insurance company asks to know who the tortfeasor is in order to sue him personally, it would seem that this is forbidden where they do not know who the tortfeasor is, since they will sue him also for things he is not obligated to pay according to Halachah. In a case where there is a police file or it is known who the tortfeasor is, since this matter depends on many details, one should ask an expert dayan, who will hear all the details of the case and rule on the matter.

The source of the law that a person may take action to save his property even though it may cause damage to another

I saw in Mishpat HaMazik (by my friend, HaGaon Rabbi David Brizel shlita, vol. 2, siman 23) that he discusses at length the matter of one who takes action to save his property and causes others to be harmed thereby. There are cases in which, if one acts to save property and prevent loss, he need not take into account the fact that others are harmed as a result of his actions. He added that today, according to the law of indemnification, there is no need to give the insurance company authorization; rather, the damage transfers directly to the insurance company. Accordingly, it is permitted for him to claim from them even though they will sue the tortfeasor, since he does not need to assist them in suing the tortfeasor; he is merely claiming his own debt.

The Erech Shai (siman 164) proved this from the words of Tosafot (Bava Batra 54b, s.v. VeYisrael), where the Gemara explains that one who buys land from a non-Jew with a monetary kinyan, but no chazakah was made upon it, another Jew can acquire the land [because the non-Jew removes it from his domain when he receives the money, while the Jew does not acquire it until he makes a chazakah upon it].

Tosafot wrote that the Jewish buyer who did not receive the field is permitted to sue the non-Jew to return his money, even though it is known that as a result the non-Jew will go and take the land away from the Jew who acquired it. This is also clear from Hagahot Ashri (there, siman 65). It is apparent from their words that even though he causes the non-Jew to steal the land from the Jew who acquired it lawfully, it is permitted for him to cause this, because he does not have to lose his own money so that others will not suffer a loss because of him. Tosafot there wrote that if the Jew who acquired the land wishes to give the buyer the money he lost, it is forbidden for the buyer to sue the non-Jew, for that would be considered mesirah. The explanation is that in such a case he is truly causing his fellow damage through grama, since he has no monetary loss, as the one who acquired the land wishes to pay him his money; only when he is claiming what is his is it not considered damage.

Now the Rosh (there) disagrees with Tosafot and holds that it is forbidden for him to sue the non-Jew, since the non-Jew will sue the Jew, and if he did sue, this is considered mesirah. One should not infer from his words that he disagrees with the principle of Tosafot, for the Erech Shai already explained that the Rosh wrote this because he holds that the non-Jew is not obligated to return his money even under Jewish law. Since he is about to sue the non-Jew improperly, and thereby cause damage to another Jew, there is no permission in this to cause him loss. In accordance with the words of the Erech Shai, this is explicit in the Maharshal (siman 36, s.v. VeAchshav), who proved from the words of Tosafot that in such a case it is permitted to sue, and wrote that the Rosh also agrees to this, but disagrees there because under Jewish law the non-Jew is not obligated to him.

In Shulchan Aruch (Choshen Mishpat, siman 58, se’if 1), it is ruled regarding a borrower who gave money to an agent to repay the lender, and another creditor came and wished to collect from these funds for the debt that the borrower owed him: the Shulchan Aruch rules that some say he cannot collect the debt, since the agent will suffer a loss, for he will have to pay the borrower because he was negligent with his money, which did not reach the lender; and some say that he may collect the debt even though the agent will suffer a loss.

The Netivot HaMishpat (Biurim, sk 4) explained the reason why one need not take into account the loss that the agent will suffer, as follows: “What difference does it make to me that you must pay? In any case, it is not yours, and I am seizing my lien, for shiabuda de’oraita, and when it is encumbered to me it is as if sold to me. From where would it follow that I should not seize what is mine because of your loss? And why should I lose so that you should not lose?”

The Netivot proved this from the Gemara (Bekhorot 48), that one may collect a debt from one partner even though the second partner will lose thereby, since he will have to divide his assets. He learned from there that a person need not lose his own money so that the other person will not lose.

This can also be proven from the Shulchan Aruch (Yoreh De’ah 168–169, se’if 15), which rules that if a Jew borrowed from a Jew with interest for the needs of a non-Jew, against the non-Jew’s collateral, and after some time the lender wants to sell the collateral, and the agent says, “Do not sell it, for the non-Jew is violent,” the lender need not be concerned with his words, because the lender has nothing to do with the non-Jew. And if the agent fears him, he should save himself and redeem the collateral, or add collateral for the borrower, so that the lender will not suffer a loss by waiting.

It is also ruled there (in se’if 12) that if he sues the non-Jew for the interest and the non-Jew will sue another Jew, he may sue him; see there. It is apparent that he is not obligated to suffer a loss so that the other person will not be harmed because of him.

Summary

A person who was harmed, and the tortfeasor has insurance, may claim from the insurance even though in practice, according to the rules of insurance law, they obligate payment even for matters for which one is not obligated according to the Torah, such as grama, damages of the category of bor, or any other matter for which the Torah exempts but the rules of insurance law obligate. However, where the tortfeasor has no insurance, it is permitted to claim only in a case where one does not need to provide his name and does not need to give authorization to the insurance. But where one must give authorization or provide his name in such a way that, without this, the insurance company would not know who the tortfeasor is, it would seem that it is forbidden to claim in this manner. There are several details of law in this matter, and each case must be discussed according to its particulars.

From the article “Torat HaMishpat”

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