Insurance in Halacha [1]

The question arises when a person suffers damage from someone who caused harm and is insured with insurance that pays for all damages, including indirect damages — grama — and various kinds of damages for which one is exempt according to Torah law. Now, when the injured party files a claim with the insurance company, the company claims from the damaging party everything that may be claimed under insurance law. This causes the damaging party a financial loss: the deductible, as is common in most cases, and also an increase in the value of the premium he pays each year. Accordingly, it must be discussed whether one may claim from the insurance company when this causes a loss to the damaging party.

The Different Types of Insurance

It is common for a person, institution, 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: a person is concerned that someone driving a vehicle may cause bodily harm or loss of life, for which the payments are very high, and therefore he wishes to insure himself so that in any case of damage the insurance company will pay in his stead.

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

There is also the broadest form of 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 for the addition of designated coverages for a variety of cases, such as a replacement vehicle in the event of theft or total loss, roadside assistance and towing services, coverage for windshield replacement, and more.

There is another type of insurance for drivers who are not interested in purchasing comprehensive insurance to cover their own vehicle in the event it is damaged and the like [especially for vehicles of low value], but nevertheless wish to be covered in the event that their vehicle causes damage to another vehicle or to property belonging to someone else, beyond mandatory insurance, which covers only bodily injury. This type also allows for 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 undertaking to pay monetary compensation for various damages that may be caused, and it 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 its conditions. 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

In various types of insurance, there are cases of damage for which, according to Halacha in the laws of damages, there is no obligation to pay. This is most commonly found in various obligations of grama, indirect causation, for which one is not obligated to pay according to Halacha, although according to civil law one is obligated; or it may be considered damage of the category of bor, a pit, or some other exemption. What is especially common in traffic accidents is that in a case where, according to Halacha, the driver who caused the accident is not obligated to pay for the damage, such as in cases of grama and the like, the question is whether the injured party may claim from the insurance company to cover the damage, since according to Torah law there is no liability for damages in such a 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 obligated under the Torah’s laws of damages, there would seemingly have been room to say that it is forbidden for him to claim his damage. But in truth it is obvious that he may claim, since the obligation of the insurance company is not based on the law of tort payments, but rather on the undertakings in the policy agreement. There, the company undertakes according to its own definitions in the insurance regulations. Accordingly, it is clear that there is no impediment to claiming from them any payment whatsoever, since in this they are obligated by virtue of the agreement, which is an external obligation, and not by virtue of the laws of tort payments.

A Claim That Causes Damage to the Insured

One must discuss a case in which the claim will cause damage to the insured, such as where, under the agreement, he is obligated to pay a deductible, as is customary, or where the cost of the future premium will rise as a result of the claim. The question is whether a person may exercise his monetary rights while causing damage to another.

Indeed, HaRav HaGaon Rabbi Menachem Mendel Shafran shlita (Kovetz HaYashar VeHaTov, vol. 9) discusses whether one may claim from the insurance company with which the damaging party is insured in order to cover one’s losses, since the insurance also includes damages that one is not obligated to pay according to Torah law. Usually, a claim causes a loss to the damaging party, both because insurance companies generally require the damaging party to pay a deductible, and because from then on the insurance payments [the premium cost] will be more expensive. From another angle, too, one must discuss whether it is permitted to claim from the insurance, for according to insurance law, in order to claim from the insurer, one must first sue the insured and obligate him, and only after the insured has been found liable does he return and 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 take two forms. Sometimes the injured party claims from his own company, which undertook to cover his damages, and that company is the one that goes and claims from the damaging party’s company. Seemingly, this is unquestionably permitted, because a person is not required to refrain from claiming what is due to him out of concern that the company will go and make an improper tort claim against another company.

But sometimes the injured party claims directly from the damaging party’s insurance company, which undertook to cover the damages that the damaging party causes. In this case there is a discussion whether one may claim from the insurance company and cause damage to the damaging party. Yet some maintain that since, when arranging the insurance, they undertake responsibility for all damages according to insurance law, the damaging party thereby undertook all these matters even where he would not otherwise be obligated. The validity of such a kinyan must be discussed, but this is not the place for it. There is still much to elaborate regarding the parameters of insurance; see at length the article of HaGaon Rabbi Avraham Rosin (MiBei Dina, 5781), who discusses many additional aspects of the halachic definition of insurance.

Claiming from Insurance When the Damaging Party Is Not Insured

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

The Source of the Law That a Person May Act to Save His Property Even Though This 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 performs an act to save his property and thereby causes others to suffer damage. There are cases in which, if one acts to save property and prevent loss, he need not take into account that others will be damaged as a result of his actions. He added that nowadays, under the law of subrogation, there is no need to give the insurance company authorization; rather, the claim passes directly to the insurance company. Accordingly, he may claim from them even though they will sue the damaging party, since he does not need to assist them in suing the damaging party; 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). The Gemara there explains that one who purchases land from a non-Jew through a monetary kinyan, but has not made a chazakah upon it, another Jew may 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].

Tosafot wrote that the Jewish purchaser who did not receive the field may 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 from the Jew who acquired it. This is also explained in Hagahot Ashri (there, §65). It is evident 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 is not required to lose his property so that others will not suffer loss because of him. Tosafot there wrote that if the Jew who acquired the land wishes to give the purchaser the money he lost, it is forbidden for him to sue the non-Jew, for this is considered mesirah. The explanation is that in such a case he truly damages his fellow through grama, since he has a monetary loss that the acquirer wishes to pay him; only when he is claiming what is his is it not considered damage.

Now the Rosh (there) disagrees with Tosafot and maintains that it is forbidden for him to sue the non-Jew, since the non-Jew will sue the Jew, and if he did sue, he is considered a moser. One should not infer from his words that he disagrees with the fundamental 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 according to Jewish law. Since he is about to sue the non-Jew unlawfully and thereby cause damage to another Jew, there is no permission to cause him that loss. As the Erech Shai writes, this is explicitly explained 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 only because under Jewish law the non-Jew owes him nothing.

In Shulchan Aruch (Choshen Mishpat, siman 58, §1), a ruling is given regarding a borrower who gave money to an agent to repay the lender, and another creditor came and wished to collect from that money 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 loss, as he will have to pay the borrower for having been 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 loss.

The Netivot HaMishpat (Biurim, se’if katan 4) explains the reason why he need not take into account the loss the agent will suffer, as follows: “What difference does it make to me that you are obligated to pay? In any event, it is not yours, and I am seizing my lien; for the lien is biblical, and when it is encumbered to me it is as though sold to me. Why should I not seize what is mine because of your loss? Why should I be the one to lose so that you should not lose?”

The Netivot proved this from the Gemara (Bechorot 48), that one may collect a debt from one partner even though the second partner will suffer loss by having to divide his assets. He learned from there that one need not lose his own money so that the other not lose.

Similarly, this can be proven from the Shulchan Aruch (Yoreh Deah 168–169, §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 wishes to sell the collateral, while the agent says, “Do not sell it, because the non-Jew is violent,” the lender need not heed his words, because the lender has nothing to do with the non-Jew. 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 lose through waiting.

There it is also ruled (§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 evident that he is not obligated to lose so that the other will not be damaged because of him.

Summary

A person who suffered damage, and the damaging party has insurance: the law is that he may claim from the insurance, even though in practice, according to insurance law, they obligate payment even for matters for which one is not obligated according to the Torah, such as grama, damages of bor, or any other matter for which one is exempt according to the Torah but liable according to insurance law. However, where the damaging party has no insurance, it is permitted to claim only in a manner that does not require providing his name and does not require giving authorization to the insurance. But where one must give authorization or provide his name in a manner such that without this the insurance company would not know who the damaging party is, it would seem that there is a prohibition to claim in this manner. There are several details of law in this matter, and each case must be considered according to its particulars.

From “Torat HaMishpat”

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