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Question: My car was damaged after being involved in a serious accident six months ago. I was responsible for the accident, according to the police report. The insurance company agreed for repairing the car. A month back, the car was involved in another accident, and again I caused the accident, according to the police report. However, the insurance company now is refusing to pay for the repair, on the pretext that I caused an accident for the second time. Is this legal? Does the insurance company have the right to refuse payment to repair my car on the grounds that I caused an accident more than once in the same year?

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Answer: As a general rule, insurance is a contract whereby both the insured and the insurer cooperate to face the risks, whereby in consideration of a specified amount or periodical premium, the insurer undertakes, upon occurrence of the event or the risk specified in the contract, to pay to the insured or the beneficiary a sum of money, an annuity or any other pecuniary right.

According to Chapter 2 of the Unified Motor Vehicle Insurance Policy against Loss and Damage, upon the occurrence of an accident, the company shall repair the motor vehicle or any of its parts, accessories or spare parts and restore it to its pre-accident condition.

But according to Chapter 5 of the same policy, the company may have recourse to the insured or the motor vehicle driver or both, as the case may be, in the amount of compensation paid in the following cases: If the accident is proven to have occurred intentionally by the insured or the motor vehicle driver.

Based on the above, the company does not have the right to refuse to repair the car but at the same time it has the right to file a case against the insurer to recover this money back if it proves that the insurer caused the accident on purpose.

The burden to proving such allegations falls on the company itself.