Question: Two months ago, my friend had a car accident and the police report said my friend was at fault and there was a lot of damage as a result of the accident. The insurance company refused to pay the compensation under the pretext that the driver was under the influence of alcohol, according to the police report. Does the insurance company have the right to refrain from paying compensation under the pretext that the driver was under the influence of alcohol? When is the insurance company entitled to refrain from paying compensation for car accidents according to the law?
Answer: Yes, the insurance company has the right to not compensate if the driver was under the influence of alcohol.
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According to Insurance Authority Board of Directors’ Decision No (25) of 2016), which was entered into to cover the damages that befall on an insured motor vehicle in the UAE during the insurance period (Chapter Four), under the title of ‘Exclusions’: The insurance company will not pay any compensation in case of the following issues:
1. Indirect losses that occur to the insured or devaluation of the motor vehicle as a result of its use, breakdown, defect or breakage of the mechanical or electrical devices.
2. The damage arising as a result of overload or in excess of the limits permissible in terms of width, length or height or in excess of the number of passengers beyond the licensed number, provided that it is proved that this is the proximate cause of damage.
3. The damage to tyres if it does not occur at the same time as the damage to the insured motor vehicle.
4. Loss or damage that occurs to the Motor Vehicle with respect to accidents resulting from: A) Use of the motor vehicle for purposes other than those mentioned in the insurance application attached to this Policy. B) Violation of laws if the violation implies an intentional felony or misdemeanour according to the definition mentioned in the applicable Federal Penal Code.
5. If it is proven that the motor vehicle has been used or utilised in a speed race or test, provided that this is proved to be the proximate cause of the accident.
6. The damage to the motor vehicle from accidents that occur during the time when the motor vehicle is operated by a driver who is 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 is found to be holding an expired driver’s licence that fails to renew it within 30 days from the date of the accident, or the licence granted has been suspended by a court or competent authorities or according to traffic regulations.
7. Loss or damage that occurs to the motor vehicle, or any part thereof, with respect to accidents while the motor vehicle is being driven under the influence of narcotics, alcohol or drugs that undermine the driver’s ability to control the motor vehicle if this is proven to the competent authorities or confessed by the driver. Exclusion does not apply in case of rental vehicles.
8. Loss or damage that occurs to the motor vehicle outside the geographical territory set out in the policy, unless a rider is issued to extend coverage to this territory.
9. The accidents that have occurred, or have been caused of that have resulted from or are related directly or indirectly to natural disasters such as floods, tornadoes, hurricanes, volcanoes and earthquakes.
10. Invasion, foreign enemy hostilities or war-like operations — whether war is declared or not — civil war, strike, civil commotion, insurrection, revolution, coup d’état, usurped power, confiscation, nationaliسation, radioactive substances and radioisotopes, atomic or nuclear explosions, or any factor directly or indirectly related to any of the foregoing causes.
11. Loss or damage that occurs to the insured motor vehicle if the company loses the right of subrogation to the person responsible for the damage caused due to the insured’s declaration of being responsible for the accident, which they have not caused. If this is proven after payment of compensation to the insured, the company may have recourse to recover the amounts paid.
12. Loss or damage that occurs to the motor vehicle off the road, as defined, unless a rider is issued extending coverage to drive outside the road.