Introduction:
Car insurance in the UAE is an important facility against accidents or damages. However, unnecessary delay in paying victims by insurance companies may create undeserved stress and financial difficulties. The Federal Decree-Law No. 48/2023 establishes the rights of policyholders through the UAE insurance law; it states that all UAE-based insurance companies must clear claims within a reasonable time frame. The Insurance Authority Board Decision No. 33/2019 has the authority to control and resolve the settlement of disputes efficiently.
According to UAE insurance law's Article 3, an insurance is a contractual agreement between the insurer and policyholder. Under this contract, an insurer promises compensation to either the policyholder or beneficiary for the specific event that arises. For instance, if there was a car accident that occurred and the policyholder already had paid premiums prior to such incidents. Subsequently, the insurance company is obligated to settle the claim and required to provide the compensation within the specified time frame.
Additionally, car insurance is classified under the property and liability insurance category as per Article 4 and ensures compensation to be paid with a specified time period for either an accident or damages.
Obligations for UAE Insurance Companies:
Chapter 6 of the UAE insurance regulation explains the obligation of the insurance companies ‘in the UAE. And it emphasizes the requirements for insurance companies that focus on timely accident compensation. All the UAE-registered vehicles should be required to obtain the vehicle insurance. Additionally, the Central Bank undertakes regular inspections, and all the insurance companies need to submit their periodical financial reports for scrutiny.
Some of the Important Provisions:
Article 27 states that insurance companies should ensure all vehicles are registered in the UAE.
According to Article 28, all the insurance companies should share the data with the Central Bank of the UAE and comply with audits.
Furthermore, the annual financial report should be submitted by the insurance companies to the central bank, and the insurance company must inform the central bank if the policyholder faces any financial difficulties, as outlined under Article 29.
Role of Insurance Authority Board Decision No. 33/2019:
Through the Insurance Authority Board Decision No. 33/2019, a committee was established to resolve insurance disputes, including unjustified delay claim payments. The committees can provide an alternative dispute resolution to avoid the usual court proceedings and ensure the policyholder can get the compensation without any delay. The committee has the authority to resolve disputes of any insurance class, regardless of the value involved, as per Article 4.
Legal Actions You Can Take if Your Insurance Company Delays Payment:
According to Article 9, the Central Bank is a supervisory authority in charge of ensuring that insurance companies follow the UAE law. The policyholder can file a complaint with the central bank in case of any delay in claims. And the central bank shall investigate on such compliance and impose the penalty on the insurance company if there is any violation found. Additionally, policyholders can also approach the insurance dispute resolution committee as an alternative solution to court proceedings for delayed claims. Unresolved complaints can be taken to a grievance committee as stipulated in Chapter 7 by the policyholder. The committee has the powers to take remedial actions against insurers, such as penalty, suspension, or liquidation process too.
The policyholder can take legal action if the insurance company refuses to pay after grievance procedures. UAE’s law recognizes insurance contracts as binding agreements, and the policyholder has the right to get delayed payment amounts. In most of the in-motor insurance cases, the court may rule in favour of the policyholder.
Penalties Introduced by Federal Decree Law No. 48/2023:
According to Chapter 7 of the aforementioned law, penalties shall be imposed if the insurance companies fail to meet their obligations and may face other legal consequences. The fines may impose up to AED 100 million. Additionally, if the insurance companies make any delay in a claim without unjustified reasons, it may lead to potential consequences such as suspension, penalties, and liquidation.
The severity of the violation may determine the penalties, which can reach a maximum of AED 100 million. Where payments are delayed multiple times, it may lead to the permanent suspension of the company license. Additionally, in some circumstances there will be personal liability towards the senior executives of insurance companies. It may lead to fines, and they may not continue to hold their position and be considered disqualified.
Conclusion:
Car owners can demand immediate payment in case of an insurance claim. The law ensures swift response from insurers by putting penalties on delays without justification, thus providing considerable protection to customers within UAE insurance terms.
Related Links
Civil Law Informative Videos
Copyright © of this article is retained by the author and/or other copyright owners. We explicitly grant you permission to download a copy, without any alteration, of this article
for personal non-commercial research or study, without prior permission or any charge. This article can be utilized on your website or for marketing, however, we grant you permission
to host this article on your website and no other rights. This content should not be altered in any way or sold commercially in any format without prior permission of the copyright holder.
During reference of this article, full biographic details entailing the name of the author, his designation, the institute and the publishing date of the article shall be provided.
