If an accident occurs before insurance is purchased, will the insurance company pay compensation?

Compiled from: Shandong High Court, China Court Network

Buying insurance in a desperate rush only after a traffic accident occurs—with the policy purchase date falling on the same day as the accident—and the insurance company failing to notice the problem during the initial litigation. Can liability for compensation ultimately be shifted to the insurance company? Recently, the People's Court of Dengzhou City, Henan Province, concluded a traffic accident compensation dispute.

Case Review

In March 2022, Zhang Wei purchased a light-duty dropside truck from another person. At 15:10 on April 6, 2022, while driving the vehicle to the southern section of a certain road in Dengzhou City, Zhang Wei struck Li Xia, who was crossing the road on an electric bicycle, causing Li Xia to be injured and both vehicles to be damaged, resulting in a traffic accident.

After the accident, Zhang Wei immediately contacted the original owner to inquire about the vehicle's insurance coverage. The original owner informed him that the vehicle's insurance had expired. Acting on advice from a "knowledgeable insider," Zhang Wei, while waiting for traffic police to process the accident, submitted an application via his mobile phone to a certain insurance company for compulsory traffic accident liability insurance and commercial third-party liability insurance, paid the premiums, and quickly completed the insurance enrollment.

The traffic police department determined that Zhang Wei and Li Xia bore equal liability for the accident. Li Xia, who was injured, was successively sent to a hospital in Dengzhou and a hospital in Zhengzhou for treatment, incurring medical expenses of over 120,000 yuan. In February 2023, Li Xia filed a lawsuit with the court, demanding that Zhang Wei and the insurance company compensate her for medical expenses, lost wages, and other costs totaling over 140,000 yuan.

During the court hearing, the defendant Zhang Wei was absent, and the insurance company argued in its defense that it was willing to assume insurance liability within the scope of the policy.

After the trial, when the presiding judge carefully reviewed the evidentiary materials concerning the vehicle's insurance coverage, it was discovered that the compulsory traffic accident liability insurance and commercial third-party liability insurance that Zhang Wei had purchased from the insurance company had a coverage period from April 7, 2022 to April 6, 2023, whereas the time of the accident recorded in the case file was 15:10 on April 6, 2022 (less than one hour earlier than the time of insurance premium payment). According to the evidence in the case file, the accident did not occur within the insurance coverage period.

However, because the time of the accident was relatively close to the time the insurance was purchased, the judge, out of caution, questioned Zhang Wei and the insurance company in detail and carefully examined all the materials related to Zhang Wei's insurance purchase process. During its cooperation with the court's investigation, the insurance company also confirmed that Zhang Wei had indeed purchased the insurance after the accident occurred, which fell outside the insurance period, and refused Li Xia's claim for compensation. Based on the valid evidentiary materials, the court ultimately ruled that Zhang Wei should compensate Li Xia for various losses totaling more than 100,000 yuan.

[1] Civil Code

[2] Article 7

[3] Civil subjects engaging in civil activities shall adhere to the principle of good faith, act honestly, and keep their promises.

[4] Author's Opinion

[5] Zhang Wei's vehicle had lapsed insurance before the accident, yet he still drove it out. Only after the traffic accident did he think of purchasing insurance to shift liability. Such speculative behavior is clearly not supported by law, first because it falls outside the insurance coverage period, and second because it violates the principle of good faith.

[6] Many car owners who buy second-hand vehicles often overlook important steps after the transfer, such as vehicle insurance, taxes, and other issues. It is important to note that when using a vehicle, one must purchase compulsory traffic insurance in accordance with the law, and it is best to also supplement with necessary commercial insurance based on one's own driving conditions. If the vehicle's insurance has lapsed, never drive with a fluke mentality; otherwise, once a traffic accident occurs, you may face high compensation costs and other legal liabilities.