Owner liability under the road transport act: What happens when someone else drives your car?
Lending your vehicle to a family member, friend, or colleague is common practice in Malaysia. However, many vehicle owners assume that any traffic violation or accident is entirely the driver's financial and legal burden. Under Malaysian law and standard motor insurance policies, the registered owner remains heavily exposed to legal penalties, financial liabilities, and administrative sanctions if something goes wrong.
Key Takeaways
Legal Accountability: Under Section 115 of Malaysia's Road Transport Act 1987 (RTA), the registered owner is legally required to identify who was driving their vehicle when an offense occurred.
Automated Summonses: Automated Enforcement System (AWAS/AES) fines and KEJARA demerit points are issued directly to the registered vehicle owner by default unless the actual driver is formally declared.
Unlicensed/Uninsured Drivers: Allowing an unlicensed or uninsured driver to operate your vehicle violates Section 90 of the RTA, exposing the owner to criminal fines, potential imprisonment, and canceled insurance claims.(Fincrew)
Insurance Excess: Lending your car to an "unnamed driver" incurs a RM400 compulsory excess on insurance claims unless you hold an "All-Driver" policy. (PolicyStreet)
Legal Framework: The Road Transport Act 1987
1. Duty to Identify the Driver (Section 115, RTA 1987)
Under Section 115 of the Road Transport Act 1987, if a traffic offense involves your vehicle, the police or the Road Transport Department (JPJ) has the legal authority to require you, as the registered owner, to furnish full details regarding the identity and address of the person driving the vehicle at the material time.
Failure to Comply: Failing to disclose this information or claiming ignorance can result in direct prosecution against the owner for non-compliance.
2. Automated Camera Fines (AWAS / AES)
Speeding and traffic light violations captured by the Automated Enforcement System (AWAS) are automatically linked to your vehicle’s registration number.
Initial Notice: The summons is delivered directly to the registered vehicle owner.
Demerit Points: Under the KEJARA demerit point system, points will accumulate against the owner's driving record unless the owner submits a formal declaration naming the actual driver within the stipulated dispute timeframe.
3. Permitting Unlicensed or Uninsured Driving (Section 90, RTA 1987)
It is illegal under Section 90(1) of the RTA to use or permit any other person to use a motor vehicle without a valid third-party insurance policy in force. (Universiti Malaya)
Criminal Liability: If you knowingly allow someone without a valid driving license or active insurance coverage to drive your car, you as the owner can be fined up to RM1,000, face imprisonment for up to 3 months, or both, in addition to facing driving license disqualification.
Insurance & Financial Risk: What Happens During an Accident?
Compulsory Excess for Unnamed Drivers
When an authorized driver who is not named in your motor insurance policy gets into an accident, your insurer will still process third-party claims, but you will incur a financial penalty:(PolicyStreet)
| Driver Status | Financial / Policy Impact |
|---|---|
| Named Driver | Standard policy excess applies (if any). Full coverage claims proceed normally. |
| Unnamed Driver | Mandatory RM400 compulsory excess payable out-of-pocket by the policyholder. |
| Driver Under 21 / 'P' / 'L' License Holder | Mandatory RM400 compulsory excess applies automatically, regardless of relationship. |
| Unlicensed / Intoxicated Driver | Claim rejected. Insurer may pay third party but will recover all costs directly from the vehicle owner. |
Loss of No Claim Discount (NCD)
Your No Claim Discount (NCD) is tied to you as the vehicle owner, not to the person driving. If the person borrowing your car causes an accident resulting in an insurance claim, your NCD will be reset to 0% upon policy renewal, causing your future annual premiums to spike.
Legal Liability to Passengers (LLP)
Under standard Malaysian private car insurance policies, liability toward non-fare paying passengers is excluded unless an Endorsement 100 (Legal Liability to Passengers) add-on was purchased. If a guest driver causes an accident resulting in injury to passengers inside your car, those passengers can sue the driver and vehicle owner directly for medical damages.
Owner vs. Driver Responsibilities: Quick Breakdown
| Scenario | Primary Responsible Party | Legal / Insurance Outcome |
|---|---|---|
| AES Speeding / Red Light Fine | Vehicle Owner (by default) | Fine issued to owner; owner must formally name the driver to transfer penalty. |
| Police Roadblock Offense (e.g. Expired License) | Driver & Vehicle Owner | Driver fined for driving without a license; owner penalized under Section 90 for allowing it. |
| At-Fault Accident (Authorized Driver) | Vehicle Owner's Insurance | Claims filed under owner's policy; owner loses NCD and pays RM400 unnamed excess. |
| Drunk Driving / DUI Incident | Driver (Criminal) / Owner (Civil) | Driver faces mandatory jail/fines; owner faces rejected insurance claims and third-party lawsuits. |
| Expired Road Tax / Insurance | Vehicle Owner | Owner fined under RTA Section 26/90; car impounded if driven on public roads. |
Recommended Action Plan for Vehicle Owners
Verify Driving Licenses: Always confirm that anyone asking to borrow your car possesses an active, valid Malaysian Competent Driving License (CDL).
Upgrade to All-Driver Coverage: If multiple household members or friends frequently drive your car, switch to an "All-Driver" insurance coverage rider to eliminate the RM400 unnamed driver excess.(PolicyStreet)
Add Named Drivers: Standard policies allow you to register up to two drivers for free. Add high-frequency drivers (spouses, adult children) explicitly to your policy.(PolicyStreet)
Complete Ownership Transfer Immediately when Selling: If you sell or transfer your car, ensure the e-Tukar / MyJPJ transfer process is completed immediately. If the buyer commits an offense before official transfer, summonses will continue reaching your mailbox.
Frequently Asked Questions (FAQs)
1. Am I liable if my friend gets caught speeding in my car?
Yes. Speeding caught via AWAS/AES cameras generates a summons mailed directly to the registered vehicle owner. To avoid paying the fine or losing KEJARA demerit points, you must respond to the JPJ notice within the prescribed period under Section 115 of the RTA with a sworn declaration providing the driver's full name, IC number, and address.
2. What happens if an unlicensed driver crashes my car?
Allowing an unlicensed person to drive your car is a criminal offense under Section 90 of the RTA 1987. Your insurance provider will reject claims for damages to your vehicle. While the insurer may be legally compelled to settle initial third-party bodily injury claims, they retain the legal right to sue you (the owner) to recover every ringgit paid out.
3. Will my No Claim Discount (NCD) be affected if someone else causes an accident in my vehicle?
Yes. NCD is attached to the vehicle owner's policy, not the driver's personal driving record. Any claim paid out under your policy regardless of who was behind the wheel—will reset your NCD percentage to zero upon your next policy renewal.
4. What is the RM400 compulsory excess in motor insurance?
If an authorized driver who is not listed as a "Named Driver" on your policy (or who holds a Probationary 'P' or Learner 'L' license) causes an accident, the insurer deducts RM400 from the total repair claim payout. You or the driver must pay this RM400 out-of-pocket to the workshop.
Simplify Your Vehicle Management with Motorist Malaysia
Navigating vehicle ownership, insurance renewals, and traffic summonses doesn't have to be overwhelming. The Motorist App is designed specifically to help Malaysian drivers stay protected and compliant effortlessly.
Instant Traffic Fine Alerts: Get notified immediately if your vehicle receives an AWAS camera fine so you can declare the actual driver on time and avoid unnecessary demerit points.
Seamless Insurance & Road Tax Renewal: Compare competitive motor insurance quotes from top insurers in as little as 24 hours to ensure you have the right named driver or all-driver coverage at the best rates.
Automated Expiry Reminders: Never let your insurance or road tax lapse—the app sends timely alerts before your policies expire.
Hassle-Free Car Selling: Thinking of selling or upgrading? Get a free vehicle valuation and sell your car directly through our trusted dealer network with full ownership transfer peace of mind.
Download the Motorist App today on iOS or Android, or visit Motorist Malaysia to get your free motor insurance quote now!
Read More: Seen dangerous driving? Here is how to report it through eAduan@JPJ
I want to find the highest selling price for my car within 24 hours!
Download the Motorist App now. Designed by drivers for drivers, this all-in-one app lets you receive the latest traffic updates, gives you access to live traffic cameras, and helps you manage vehicle related matters.
