Two systems respond to the same event separately
Driving while impaired triggers a criminal process and an insurance process, and they run on different tracks with different rules. The criminal outcome concerns the driver’s licence and liberty. The insurance outcome concerns who pays for the damage, and it is possible to be dealt with harshly by both, or by one and not the other.
The limit that applies, how it is measured, and what the penalties are all differ by jurisdiction and change, so nothing here describes any particular country’s rules. What recurs across markets is the shape of the insurance response, and that shape is worth understanding before rather than after.
Victims are usually protected even when the driver is not
Compulsory motor insurance exists to protect people injured by drivers, and legal systems generally do not allow that protection to evaporate because the driver behaved appallingly. So an insurer will normally deal with a third party’s injury claim arising from an impaired driver’s collision, because the obligation runs to the victim rather than to the policyholder.
That is the part people hear about, and it is the source of a widespread and dangerous belief that impaired driving is somehow covered. It is not covered. It is paid, which is a different thing entirely, and the difference falls on the driver.
The insurer can come back for the money
Wordings very commonly reserve a right to recover from the driver anything the insurer was legally obliged to pay to a third party as a result of a loss the policy excluded. Where such a clause exists and the local law supports it, an impaired driver who injures somebody can face a personal demand for the entire cost of that claim.
The sums involved in a serious injury are life-altering, and there is no insurance standing behind the driver at that point because the driver is the person being pursued. This is the single most important practical fact about impaired driving that is not a legal penalty, and it is almost never mentioned alongside the ones that are.
Your own vehicle is generally not covered at all
The recovery point concerns liability to others. Damage to the driver’s own car is a different section of the policy, and exclusions for loss occurring while the driver was over the applicable limit, or unfit through drink or drugs, are standard. A destroyed vehicle in those circumstances is simply a loss the owner carries.
Related exclusions catch the passenger side too in some wordings, and the personal accident benefits discussed elsewhere in a policy are routinely excluded where impairment was involved. The document is consistent about it: the protection runs outward to other people, not inward to the person responsible.
Lending a car has consequences for the owner as well
An owner who permits somebody to drive while impaired may face proceedings of their own in many legal systems, and where the driver was not covered under the certificate the owner can be exposed for permitting uninsured use. The keys are the decision point, and handing them over is an act with legal weight.
Passengers occupy a milder version of the same position. In several jurisdictions a passenger who knowingly travelled with an impaired driver can have their own compensation reduced on the basis that they contributed to their injury, and that reduction applies to a claim they might otherwise have recovered in full.
None of this depends on anybody having been asked. Whether a driver is covered at all is decided by the certificate and the wording rather than by permission given at the door, and an owner who assumes a friend is covered because they were told they could take the car is relying on a document neither of them has read.
The traps are timing and refusal
Alcohol leaves the body slowly and at a rate that no rule of thumb reliably predicts, which is why driving the following morning produces convictions from people who were not drinking at the time and believed themselves fine. The exclusions in a policy apply to the state of the driver, not to when the drinking happened.
Refusing to provide a specimen is treated as seriously as a positive test in many systems, and it does not preserve any insurance position either, since an insurer can decline on the basis of the conviction that follows. Prescription and over-the-counter medication is a further complication where drug driving rules are drafted around impairment rather than around illegality. All of this is jurisdictional, and the local rules are the ones that count.
