More and more people use their own car to drive the family one hour and an app passenger or a restaurant's order the next. The car is the same, the use is not – and the premium and policy conditions of a personal casco policy are built on private use. As a broker, I see this as one of the biggest, yet most underestimated, risks: the driver assumes it is “only a few rides a week”, but the policy conditions do not recognise an “occasional” category. This article shows what policy conditions say about platform work and courier work, what happens in a claim if this was not reported, and how the situation can be put on a proper footing.
- Casco policy conditions accept the risk for the type of use stated in the contract: passenger transport for payment (taxi, passenger transport services), renting the car out and, in some policy conditions, goods transport, driving instruction and use as working machinery are excluded, or accepted only under a separate agreement and for a separate premium.
- A ride accepted via a platform is, legally, road passenger transport for payment – an activity requiring a licence under Government Decree 176/2015 (VII. 7.) – and therefore not private use; the platforms' terms for drivers typically place the obligation to insure the vehicle on the driver.
- Under Section 6:452 of the Hungarian Civil Code (Ptk.), a change in use is a material circumstance that must be reported: if it is not, as a general rule the insurer's obligation does not arise. The workable route is to report it – under Section 6:446 the insurer may amend or terminate the contract, while another insurer may accept the risk for a separate premium.
Why does it matter to the insurer what you use the car for?
The premium and policy conditions of casco are built on a risk profile: how much the car is driven, in what kind of traffic, who travels in it, where it is parked at night. Transport for payment changes all of these – more kilometres, dense city traffic, unfamiliar passengers, frequent stops, night hours – which is why policy conditions treat the nature of use as one of the basic data on which the risk is accepted. One Hungarian set of casco conditions excludes damage that occurred while the insured vehicle was being used in a manner or for a purpose other than that specified in the contract; another expressly states that it does not accept the risk for vehicles used for road passenger transport (taxi) or car hire, and does not pay for damage sustained during a race or while a special-purpose vehicle is carrying out work. Goods transport for payment and driving instruction are a separate category in some policy conditions, while elsewhere they fall under the general “use specified in the contract” clause. The exact list varies from insurer to insurer – the exclusions map shows where to look in your own policy conditions.
Platform rides in legal terms: passenger transport for payment
Many drivers see themselves not as taxi drivers but as “app partners” – the law sees it differently. Under Government Decree 176/2015 (VII. 7.) on road passenger transport for payment by passenger car, this activity requires a licence: it can be carried out as a taxi service or as a passenger car transport service, with separate requirements for the driver and the vehicle, and the licence is issued by the government office (kormányhivatal). From the insurer's point of view, this means that a ride accepted via a platform is passenger transport for payment, and so falls outside the category of private use – regardless of whether it takes up two or forty hours a week. The platforms' contractual terms for drivers typically place the obligation to insure the vehicle on the transport service provider – the driver or their business; it is worth checking in your own contract what your platform does and does not undertake, because the platform does not make up for missing personal casco cover.
Courier work – delivering food or parcels for payment – is goods transport, and likewise a business activity. Some policy conditions name it specifically, others deal with it under the general use clause; what they have in common is that the insurer has to be told. For compulsory motor third-party liability (MTPL) insurance, the nature of use is also a premium rating factor, which must likewise be stated truthfully – MTPL pays the injured party, but damage to your own car is a matter for casco, as the casco and MTPL case map shows.
What happens in a claim if you did not report it?
Under Section 6:452 of the Hungarian Civil Code (Ptk.), when the contract is concluded the policyholder must disclose every circumstance that is material to the insurer's acceptance of the risk, and must report changes in material circumstances in writing. If this obligation is breached, the insurer's obligation does not arise, unless the policyholder proves that the insurer was aware of the circumstance that was withheld or not reported, or that it did not contribute to the occurrence of the insured event. The policy conditions set a short deadline for this: one of the sets of conditions mentioned asks for changes in material data to be reported within 5 working days, the other within 15 days – the latter also specifically names starting to work as a taxi or renting out the car. This is not exemption in the legal sense of the word: the insurer relies on the failure to disclose and on use not stated in the contract, and you would have to prove that the use did not contribute to the damage – in a collision during a ride, this rarely succeeds. That is why undeclared use is a regular feature among the reasons for rejection.
Two further questions are worth checking in your own policy conditions. First: does the exclusion apply only to damage sustained during a ride, or does undeclared use affect the whole contract – theft and hail damage too? Policy conditions differ on this. Second: what can the insurer see? In an accident during a platform ride, the passenger, the app's route and time data and the police report are all available; a business tax number is public information, and the licence issued by the government office can be verified with the authority. The “nobody will find out” strategy is therefore no strategy at all.
How can you put it on a proper footing?
Reporting the use is the policyholder's non-transferable obligation – the form and the consequences are described in the article on reporting changes in your details. After the report, under Section 6:446 of the Ptk., the insurer may, within fifteen days of becoming aware of the change, propose an amendment to the contract – typically with a higher premium or a different deductible – or terminate the contract in writing with thirty days' notice; if you do not accept the proposed amendment or do not reply within fifteen days, the contract terminates on the thirtieth day after the proposal was communicated, provided that the insurer drew your attention to this consequence. The possible outcomes are therefore:
- The insurer accepts the risk, with an amended premium and terms – in that case, the nature of use should be recorded precisely on the policy.
- The insurer declines the risk – there are products on the market that provide casco for passenger transport or courier use; if you ask, I make enquiries about this across the market, based on your details and without recommending any insurer.
- Partial solution: if collision damage cover is not available, theft and natural-hazard cover may still be an option – whether this is possible with a given insurer depends on its policy conditions.
- Business form: if you carry out the activity through a business, the question of who is the policyholder and who is the registered keeper also has to be settled – the logic of the article on a company car used privately also works in reverse.
And there is one limit: casco does not protect people. Injuries to passengers are covered by the compulsory MTPL insurance, but the driver's own injuries are not – this is dealt with in the article on personal injury. If you are preparing to do platform work, or are already doing it, bring the details of your actual use to the needs assessment: hours per week, typical area, share of night driving, where the car is kept. From this I can prepare a request for quotation in which the nature of use is stated truthfully – because casco pays only for what is an insured event under your contract, and with undisclosed use that sentence can turn out to be very short when it comes to a claim.
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Sources
- Hungarian Civil Code (Ptk., Act V of 2013) Sections 6:446, 6:452 – significant increase in risk; duty of disclosure and of reporting changes
- Government Decree 176/2015 (VII. 7.) on road passenger transport for payment by passenger car
- Government offices (Kormányhivatalok) – Information on the licensing procedure for passenger transport for payment by passenger car
- Generali – Special conditions for vehicle casco insurance (JCKF29), VI.10: use other than as specified in the contract; VIII.1.1: reporting changes within 5 working days
- UNIQA – Multi Casco Plus insurance: customer information and general terms and conditions (in force from 23 September 2022), point 4 (exclusion of taxi use and car hire), point 14 (reporting changes within 15 days, starting taxi work or renting out)
- Bolt – General Terms and Conditions for Transport Service Providers and Drivers (the current version applies)
