The insurer refuses to pay my judgment against its driver. What can I do?

You were injured in a road accident, sued the driver, and won. The driver has no money, and the insurer says it will not pay because the driver breached the policy. This guide explains the insurer's statutory duty to pay, and the conditions you must meet.

The insurer's duty to satisfy judgments

Under section 96(1) of the Road Transport Act 1987, if:

• a certificate of insurance was delivered to the person who took out the policy; and
• judgment is given against a person insured by the policy, for a liability that must be covered under section 91(1)(b) (death or bodily injury caused by use of the vehicle on a road) and that is covered by the policy's terms,

then the insurer must pay the persons entitled to the benefit of the judgment the sum payable, including costs and interest, even if the insurer may be entitled to avoid or cancel, or has avoided or cancelled, the policy.

This protects injured third parties from disputes between the driver and the insurer.

The conditions and exceptions

The insurer does not have to pay under section 96(1) in certain cases (s.96(2), (3)):

• No notice: unless the insurer had notice of the proceedings before or within seven days after they were commenced.
• Stay pending appeal: while execution of the judgment is stayed pending an appeal.
• Cancelled policy: if, before the accident, the policy was cancelled and the certificate was surrendered or declared lost within the times the Act sets.
• Prior declaration: if, before the liability arose, the insurer obtained a court declaration that the insurance was void or unenforceable, subject to notice requirements to the claimant.

The seven-day notice is the condition most often missed. Notice should be in writing, sent to the insurer named in the driver's certificate, with proof of delivery.

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Finding out who the insurer is

A person against whom a claim is made for a liability that must be covered must, on demand, state whether they were insured and give the policy particulars in the certificate (s.98(1)). The police report and vehicle records also usually identify the insurer.

If the driver is bankrupt or wound up

If the insured becomes bankrupt, or a company insured is wound up or placed in receivership, the insured's rights against the insurer for the liability are transferred to and vest in the injured third party (s.97(1)). Agreements made between the insurer and the insured after the liability arose cannot defeat those transferred rights (s.99).

Property damage

Section 96 applies to liabilities required to be covered under section 91(1)(b). Property damage is not part of that compulsory cover, so recovery for vehicle damage depends on the policy terms and the general law.

What should I do first?

1. Identify the insurer from the police report or by demand under s.98.
2. Give written notice of the proceedings to the insurer within seven days of filing.
3. Keep proof of delivery of the notice.
4. Write to the insurer after judgment, demanding payment under s.96.
5. Consider enforcement steps if payment is refused, with advice.

Example

A motorcyclist obtains judgment against a car driver for injuries. The insurer refuses payment, saying the driver was not authorised to drive under the policy. The motorcyclist's lawyer had sent the insurer notice of the writ three days after filing. Since the liability is for bodily injury and notice was given in time, section 96(1) requires the insurer to pay, leaving it to pursue the driver separately.

Common mistakes

• Not sending notice to the insurer within seven days.
• Sending notice to the wrong insurer or without proof of delivery.
• Assuming the insurer's policy defences bind the injured claimant.
• Overlooking s.97 where the driver is bankrupt.

When to speak to a lawyer

Speak to a lawyer before filing a road accident claim, so notice is served in time, and if the insurer refuses to pay. See our civil litigation page; you can also contact us.

Frequently asked questions

Does the insurer pay interest and costs?

Yes. Section 96(1) includes costs and interest payable on the judgment sum.

What if the insurer obtained a declaration that the policy was void?

If obtained before the liability arose, the insurer may not have to pay, subject to the Act's notice provisions. Take advice on the dates.

Is there a time limit for the original claim?

Personal injury claims are generally subject to six years under section 6(1)(a) of the Limitation Act 1953.

Sources & fact check

Legal points in this article were checked against the primary sources below. The law can change; this is general information, not legal advice.

1. Road Transport Act 1987 (Act 333), as amended by Act A1618 (2020), AGC Laws of Malaysia
2. Limitation Act 1953 (Act 254), including section 6, AGC Laws of Malaysia
3. Rules of Court 2012 (P.U.(A) 205/2012), text published by the Malaysian Bar, including Orders 12, 13, 18, 19 and 93
4. Office of the Chief Registrar, Federal Court of Malaysia (Judiciary portal)

Fact-checked on 17 Oct 2026