Question: My car is fully insured. A month ago, my car met with an accident, but the insurance company refused to pay any compensation on the ground that the driver was under the influence of alcohol when the accident occurred and also that the car’s licence had expired. Does the insurance company have the right to refuse to pay compensation for the said reasons? What are the legal measures to be adopted against the insurance company to force it to pay compensation? Is there a time limit for claiming such compensation? Please advise.
Answer: First of all, the Unified Motor Vehicles Insurance Policy against loss and damage gives the insurance company the right not to pay compensation or to take recourse to the insured under the following issues:
A) In case damage to a motor vehicle occurs due to an accident while the vehicle was being driven by a person who was not licensed to drive, according to the Traffic Laws, or without obtaining a driving licence for the kind/category of motor vehicle according to the Traffic Laws and Regulations and the provisions of this policy, or if the driver was holding an expired driving licence who fails to renew it within 30 days from the date of the accident, or the licence granted to the driver had been suspended by the court or competent authorities or according to the Traffic Regulations.
B) In case the loss or damage occurs to a motor vehicle, or any part thereof, with respect to accidents while the motor vehicle was being driven under the influence of narcotics, alcohol or drugs that undermine the driver’s ability to control the vehicle if this is proven to the competent authorities or confessed by the driver. This exclusion does not apply in case of rental vehicles. In case the vehicle’s licence had expired, the insurance would still be valid for 30 days after.
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Secondly, you have the right to file a civil case and submit all the documents related to the matter and the court will take a decision whether to ask the insurance company to pay the compensation or not.
Article 1036 of Civil Transactions Law states: Actions arising out of insurance contracts shall be barred by limitation after the expiration of three years from the date of the occurrence of the incident, which gave rise to such action, or of the knowledge of the interested party about its occurrence. This period, however, shall only run, in the event of concealment by the insured of the information relating to the risk insured against, or submission of incorrect statements, as from the date the insurer has taken knowledge thereof.