June, Sunday 09, 2019
Car owners in Dubai commit to vehicle insurances as a fail-safe way to protect their life and asset in the occasion of a theft or an accident. In general premium you pay for your vehicle and the coverage you get depend upon a number of factors, varying from your age and driving history to the car model and its year. However, did you know that your insurance company can terminate your policy mid-tenure for some of the most common mistakes, which you believe can be ignored?
In a world where 1.25 million people die in road crashes each year, with an additional 20 to 50 million are injured or disabled, car and motor insurances are an inevitable part of every vehicle owner’s financial commitment. With the unpredictable reality of life, it is always better to be safe and insured than sorry. But, even after paying all that premium on time, you could be in for an unpleasant surprise when you find that your car insurance has been invalidated.
Even a seemingly innocent slip up can cost you a claim rejection, policy cancellation or even make you liable to pay for any damages or repairs from your own pocket.
The current UAE law states that insurance companies can cancel the ‘own damage’ section of a comprehensive car insurance policy only after giving 30 days of prior notice to the policyholder. In such cases, the paid-up premium is refunded back to the policyholder after deducting a proportional premium for the active policy period.
But, before we discuss the results of cancelled insurance or a nullified car insurance claim, take a look at these scenarios that can put you in a spot.
Traffic Law Disobedience
Have you ever had an issue with the authorities over traffic rule violations? While the severity of these issues varies, jumping traffic lights and getting speeding tickets might have already caught the attention of your car insurers. However, graver issues like driving under the influence of alcohol, leading to your driving license suspension or jail time give your insurance company substantial reasons to cancel your policy.
One of the most common mistakes that drivers do is to accidentally leave their car unlocked. This not only puts the vehicle at the risk of theft and vandalisation but also jeopardises your insurance coverage. If it is found that your car was stolen or damaged after being left unlocked, your insurance company can refuse the claim or even cancel your policy.
The UAE’s safety rules state that every car must be maintained in a good roadworthy condition at all times. Car owners are expected to send away their car for regular maintenance and fix any glitches or malfunctions without delay. Insurance claims on cars are only valid if they are made for a well-maintained vehicle.
Using Personal Car For Business
Most car insurance policies clearly state that the insurance coverage is limited to the driver’s private use of the vehicle. If your personal car is found to be in use for business at the time of an incident, then your claim could be rejected.
For business uses, it is necessary to have a commercial vehicle license.
Loaning Car To Third Parties
Every car insurance policy will have the owner and one or two named drivers in the policy who are allowed to use the car. If your car gets into an accident while being driven by a friend who is not named in the policy, the insurance company is not liable to pay for any of the damages. Intentionally allowing a third party user to drive your car can even lead to cancellation of your policy.
Undisclosed Car Modifications
Undisclosed car modifications that affect the performance, safety or value of your car can result in car insurance policy cancellation. In this scenario, the best plan is to inform your insurer about your modification plans. This also allows you to review your policy coverage and understand what is included and excluded in your policy.
Insurance fraud of any kind is the worst way to go about a car insurance claim. If the insurer realises that a claim is fabricated or if the owner has deliberately gone against the terms and conditions of the policy, your car insurance policy will be terminated with immediate effect. Further, insurance fraud is a criminal offence which can get you into further trouble with law enforcement authorities.
Ignorance is not the answer when it comes to taking a car insurance policy. Every policyholder must be well aware of the whats and whatnots of their policy and act accordingly with their insured asset. Remember to steer clear of these common mistakes any and others included in your policy to avoid getting your insurance claim or policy nullified.