Does bad debt coverage apply to children who are incapable of tortious acts??

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When questions like this suddenly arise: A child under the age of seven screws something up, and the liability insurance of mom and dad doesn’t want to pay – does the injured party’s bad debt coverage actually step in?? That’s what it’s for, isn’t it?? We asked and received a clear answer.

It’s cases like this that kind of come out of nowhere and create question marks. For example, when researching a story for the upcoming issue of Pfefferminzia. The question is whether the bad debt coverage pays when a child who is incapable of committing a crime has caused damage and the family’s liability insurance waves off the claim.

So the following assumed case: Little Henry Jones learns to ride a bicycle. Undaunted, he drives up and down, up and down, up and down the driveway of his childhood home. Then it happens, and he crashes into the car of neighbor Gerd Schroder. Paint damage.

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Mr. Schroder wants to be compensated for the damage. But the family liability of Henry’s father Bernd rejects. Henry was not yet seven years old and therefore incapable of tort, so not responsible for his actions. Thus he would not be liable, and consequently the liability would not be responsible.

Also the question whether Bernd Jones violated his duty of supervision is quickly off the table. He didn’t, because he had his child in view and simply couldn’t intervene fast enough. Occurs, is normal.

No claim – no bad debt

Thus Gerd Schroder does not get any money from the Jones’ liability insurance. However, he has included in his own liability a so-called bad debt coverage. It stands in for Mr. Schroder if someone else damages him, but he has no liability. So also in the case of paint damage caused by little Henry?

An inquiry with Allianz reveals: No, bad debt coverage doesn’t kick in. "The basic prerequisite for application is a legitimate claim against a tortfeasor under German law," informs the insurer. However, Gerd Schroder does not have such a legitimate claim, because Henry Jones is not liable for his actions. And neither does his father, because he has fulfilled his supervisory duty.

This results in the following causal chain: where there is no liability, there is also no claim. And where there’s no claim, there can’t be a claim. And where there’s no bad debt, there’s no bad debt coverage to blame. In the end, it makes sense, but doesn’t help Mr. Schroder.

Author

Andreas

Andreas Harms

Andreas Harms has been an editor at Pfefferminzia Medien GmbH since January 2022.

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