UAE court fines an insurance company DH200,000 over a traffic accident

The decision of the Insurance Disputes Settlement Committee, directing an insurance company to compensate two persons injured in a traffic accident brought on by one of the firm's covered vehicles, was upheld by the Civil Court of First Instance in Dubai.

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The committee's ruling was contested by the insurance company, which claimed that the accident was not covered by its policy. But the appeal was rejected by the court.

In detail, the insurance company contested the committee's ruling, which mandated compensation payments to the accident victims. The company claimed the decision lacked validity, evidence, and a legal basis. It also argued that the accident wasn't covered under the terms of the unified insurance policy in the UAE, rejecting the vehicle owner's complaint due to coverage exclusion and dismissing the compensation claim as unauthorised and contrary to Islamic Sharia.

The corporation claimed that the collision was not covered by insurance and used these claims, together with logical fallacies and a breach of the right to defend, as justification for its appeal.The court continued with the case when the defendants filed a counter-appeal, requesting that the appeal be dismissed. The court confirmed that the appeal complied with all formal criteria.

The court's decision made it clear that, regardless of who was at fault in an accident involving a vehicle insured by the insurance company, injured parties are entitled to compensation from the insurer for losses sustained in such an event, per the precedent set by the Court of Cassation. Nevertheless, the insurance provides no benefits to the driver of the vehicle at the time of the accident or to the insured person.

It was mentioned that the conditions and beneficiaries are established in accordance with the agreement between the parties to increase insurance coverage through an addition to the combined insurance policy. In the event that a covered risk materialises, the insurance provider is required to pay the beneficiary in accordance with the annexe, up to the lesser of the damage value or the insured amount.

Upon reviewing the case materials, the court found the committee's decision well-founded, addressing both factual and legal aspects adequately. Consequently, the court upheld the decision, requiring the company to compensate the affected parties with 200,000 dirhams.

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