Insurance in Halacha [2]
In this article we will explain the permitted and forbidden ways of bringing claims in civil courts in matters of damages, in cases where according to Torah law there is no obligation to pay. We will also discuss the law regarding claiming insurance in the case of paid car rental from someone not authorized by law, and the issue of paying for a ride to a driver who, or whose vehicle, does not have a license to transport passengers for pay.
The halachic permission to claim from insurance
HaRav HaGaon Rabbi Menachem Mendel Shafran (Kovetz HaYashar VeHaTov, vol. 23) discusses a case in which the injured party sues the person who caused the damage in beit din, and the latter argues that he has insurance, but the insurance company will not pay based on a ruling of beit din, and therefore demands that the injured party sue in court. The injured party claims: I do not want to sue in civil courts, only in beit din. He inclines to say that the law is with the one who caused the damage: just as where the claimant would suffer a loss if he did not sue in civil court — for example, if there would be no source from which to collect under Torah law — it is permitted to sue in civil court, as ruled in Shulchan Aruch (Choshen Mishpat 26:2), so too, if the defendant would suffer a loss if he is sued in beit din, he may say: sue me in court, since I would otherwise suffer a loss.
He added that when dealing with major damages, especially bodily injury, every driver is initially obligated, by virtue of a public enactment, to take out insurance in case he causes harm, so that the injured party will have a source from which to collect. It is therefore considered beneficial to every injured party that the person causing damage have insurance, even if, on some occasion, it results in a loss for him because he must sue in civil court, since otherwise he might have no source from which to collect, and the damages he would receive according to law would be less. It was with this understanding that people entered the public domain, and with this understanding the public grants permission to drive vehicles on its public roads; they established among themselves the rules of damage payments such that the claim should be made in a manner that is insured.
He wrote that this resembles what is explained in the Gemara (Bava Metzia 27b): according to the opinion that identifying signs are not a Torah-level proof, the reason a lost object is returned based on signs is that the owner of the lost object is pleased to provide signs and take it back, etc. Rashi explains that all those who lose objects are pleased that this be the law in Israel — to provide signs, and anyone who comes and gives them may take it. Why? He knows that he has no witnesses; at times he has no witnesses concerning it, and if he were required to produce witnesses, it would never come back to him. He says: it is better for me that they return it to anyone who states its signs, for it is uncommon that someone other than I will state its actual signs, since others do not know them.
From this we can learn that wherever there is a clear and unquestionable assessment that each person waives his right to sue in beit din when in civil court he will certainly be able to receive damages from the insurance company, whereas from the one who caused the damage he will not be able to collect because that person lacks the means, or because the law obligates only a small amount — this is beneficial to every injured party, and it was with this understanding that people made use of the public domain.
Collecting damages for bodily injury nowadays
In Shulchan Aruch (Choshen Mishpat 1:2) it is ruled that if a person injures another, judges who do not have semichah in Eretz Yisrael do not collect payments for damage, pain, and humiliation, but they do collect for loss of work and medical expenses. Nevertheless, Shulchan Aruch (ibid. 1:5) rules that even with regard to fines, which judges without semichah do not adjudicate, he is nevertheless placed under a ban until he appeases his litigant; and whatever he gives him that is close to the amount assessed by the beit din is sufficient. This is an enactment of the Geonim.
Insurance for work-related injuries in a hotel or any workplace, or for a patient treated by a doctor
Regarding the employer’s obligation to pay for the injury of an employee injured at work: were it not for the existence of insurance, it would seemingly be impossible to obligate the employer, since generally the employee caused the harm to himself. Even where the employer injured him, the laws of bodily injury are not adjudicated nowadays. And even if he would have to pay medical expenses or a fine for appeasement, it would in any event not be a large payment like that paid by insurance.
The same applies to a visitor who visited a hotel, a wedding hall, or any other public place and was injured. Where he harmed himself, one certainly cannot obligate the owner of the place. Even in the case of an obstacle, which is generally considered a “pit” (bor), there are no medical payments for damages caused by a pit, only compensation for the damage itself, assessed like a slave sold in the market. Likewise, a doctor who caused harm, even if he was negligent in his work, is sometimes entirely exempt under human law if he did not intend to cause harm; and where he was not negligent in his work, he is exempt even under the law of Heaven.
However, when insurance has been taken out, the obligation to pay follows the rules of the insurance. Therefore, when an employee is insured by the employer, or visitors to a hotel, or a patient of a doctor — when insurance exists — the insurer is obligated to provide the insurance payment for the benefit of the insured, based on a monetary agreement; and every monetary condition is valid. This is as ruled in Shulchan Aruch (Choshen Mishpat 315:4) regarding the law of hiring a young worker: if the hirer undertook that if the youth would be harmed, the hirer would be obligated to pay the employer the amount of his loss, the law is that he is obligated even though no formal kinyan was made, since any condition in a hiring arrangement does not require a kinyan.
This, then, is the basis of the obligation regarding a worker hired by an employer, when the terms of employment state that the employer is obligated to insure him. Similarly, when one rents a place for payment — in a hotel, swimming pool, or any other place — payment for insurance is also included; and with a patient treated by a doctor, the payment also includes insurance fees. As stated, the basis of the obligation is not the rules of one who injures or causes damage, but the force of a condition in the hiring arrangement, for such a condition is valid. There is much to elaborate on in this matter, but this is not the place.
Car accident insurance: property damage and bodily injury
Until now we have dealt with situations in which part of the terms of hire is to insure through an insurance company; in such cases, the law is that the employee, the renter, or anyone who has such a condition may demand that the insurance be utilized. However, in injuries resulting from a car accident, this reasoning does not apply, for there is no agreement made between the driver of the vehicle in a case of indirect damage (grama), or any other situation in which according to Torah law he is not obligated to pay. One cannot obligate him to pay from the insurance, since the insured party takes out [third-party] insurance for his own benefit in the event that he is indeed obligated to pay according to the law. The proof is that third-party insurance is not considered mandatory. Therefore it appears that one cannot obligate the offender who is exempt from payment according to Torah law to activate the insurance for the benefit of the injured party [thereby causing him a loss, since he has a deductible and increased premium payments in future years], unless the injured party covers the losses of the offender.
By contrast, in the case of bodily injury caused by a vehicle insured with mandatory insurance, it can be said that the offender is obligated to pay even where the payment rules do not correspond to the payment required by Torah law. This is because mandatory insurance is made for the benefit of the injured party and is an obligation upon the driver; without it he is forbidden to go onto the road. It follows that the insurer who provides mandatory insurance has, as it were, made a kinyan-obligation to pay the injured party according to the rules of the insurance.
Car rental known as a gemach
One must know that when renting a car from a company that is not authorized to rent vehicles, or from a private individual and the like, and paying for the rental, according to the insurance policy the insurer’s liability in the case of a business purpose in exchange for payment, wages, or other consideration exists only if that purpose is explicitly stated in the vehicle insurance policy. Usually, in insurance for a private individual or for a company not authorized to rent vehicles, the policy does not state that the vehicle may be used for a business purpose. Therefore, one who rents it out for payment — which is considered a business purpose — is not covered by the company.
Landlords who wish to rent out their car for payment devise a stratagem: out of concern that if the car is damaged the insurance company will not pay, and since they do not want to steal from the insurance company and take payment while the car was rented out, they agree with the renter that the car is rented for payment, but if the car is damaged and they need to activate the insurance company to receive payment for the damages, it will then be clarified retroactively that the car had been lent free of charge, in which case the company provides coverage.
One must know that aside from the prohibition of falsehood involved, this is absolutely forbidden, for it is obvious that an insurance company does not agree to insure in this manner.
Beyond the halachic prohibition, which is theft [and even theft from the public — in insurance companies whose shares are held by the public], one should know that when the damage is a large sum, an insurance company may appoint a private investigator who checks the details of the case: for what reason the car was given, what relationship exists with the person who rented it out, and various other possibilities. In reality, investigators usually discover that the rental was for payment and that the insurance policy does not cover the damage event; consequently, the insurance company does not pay for the damage.
One who suffers bodily injury where the driver or vehicle has no insurance
Nevertheless, any person who suffers bodily injury in a car accident and, under the law, has no insurer from whom he can claim any damage or even medical treatment beyond the basic treatments included in the health basket paid by the health fund, may turn to the insurance company “Karnit,” which is a fund for victims of road accidents. Its role is to compensate victims who cannot receive compensation from an insurance company, generally in situations where the specific case is not covered by the policy under the conditions set by law, or where there is no insurance policy at all, or in a hit-and-run case where the offender is unknown, and the like.
For the injured party, it makes no financial difference from whom he receives compensation, since the amount of compensation paid by Karnit is supposed to be identical, according to the same criteria, to what he would have received from the insurance company had the case been covered by the policy.
The fund’s operations are financed essentially by the insurance companies themselves, which transfer each month a percentage of the insurance premiums, or a certain amount from the insurance premiums, directly to Karnit.
Several cases came before me in which a car had been rented out for payment and there were bodily and property damages, and the insurance company did not pay the damages, claiming that the car had been provided for payment. The injured parties sued Karnit, which paid the expenses for bodily injury, but the company then sued the driver for all damage expenses, compensation, and all the customary related claims, reaching very high sums. One should know that in most cases it is also possible to sue the owner of the car who gave the car for payment, or the person in whose name the car is registered, and the like.
Paid rides
As written in the insurance policy, the company does not provide coverage unless this is explicitly stated; and in the insurance of a private individual this is not written. It is common for a person in his private vehicle to transport people for payment [known as a “driver”]; according to the insurance policy, the insurance company does not cover such a case.
However, one must know that a passenger whose driver drove the vehicle in a manner not covered by the policy — the injured party or passenger is generally entitled to claim compensation from “Karnit,” and Karnit has the right to sue the driver and the owner of the vehicle for everything it paid to the injured parties. Therefore, the matter of riding with a paid driver in a vehicle, without his having a lawful license for such transportation, is not at all simple.
Transporting people in a vehicle with cost-sharing
Several years ago, when the state wanted to introduce the matter of shared rides, it enacted a set of regulations permitting this under the following conditions: the driver or vehicle must not have performed more than two rides per day; the number of passengers must not exceed four besides the driver; the ride must have been arranged in advance [it is forbidden to pick up a passenger who was not included in the prior arrangement]; the maximum amount that may be received is 2 shekels for each kilometer of travel; and the expenses must be divided equally among all the passengers in the vehicle on that ride, including the driver.
Responsibility for construction
One should also know that a person who builds an addition or any other construction on his property, as the apartment owner, bears responsibility toward the workers and for any damage caused during the course of construction. Even when hiring a contractor or construction supervisor and writing in the work contract that the contractor is responsible for damages, under the law this does not exempt the apartment owner, unless he hired a licensed contractor who is legally permitted to perform this type of work; in that case, the contractor is responsible for the work. In addition, the apartment owner must ensure that there is insurance for the work and that the construction process complies with all workplace safety regulations. Therefore, for any building addition, it is recommended to hire a registered contractor and to follow all construction rules required by law.
Practical recommendation
Therefore, when renting a car, it is recommended to rent only from an official company legally authorized to rent out vehicles for payment and that observes all safety rules. Anyone who takes people in his car for payment to a workplace or any other place and wants them to share in the expenses — the article has presented the conditions under which this is possible. It is also recommended to check with the insurance company or with an attorney specializing in the field what the current conditions are at that time so that the ride will be insured, and not to become one of those who cry out after the fact. Likewise, when carrying out a building addition or any work, it is recommended to hire a registered contractor and follow all safety rules; otherwise, the apartment owner bears responsibility for the work.
