Insurance Coverage for Victims: Examining Coverage for Victims in Fault, Drunk Driving or Drug-Related Scenarios

Galadari Insights: Insurance Coverage for Victims: Examining Coverage for Victims in Fault, Drunk Driving or Drug-Related Scenarios

Victims of traffic accidents often appeal to insurance companies for compensation, regardless of the type of insurance or exceptions outlined in the policy This applies even in cases involving conditions such as driving under the influence of alcohol, driving underage or lacking a valid driving license.

 The legal regulations governing these relationships are well-established, and insurance companies are obliged to pay the full insurance value.  In the event of the driver’s negligence, tort liability or even the driver’s demise, the legal rules are clear.  Regardless of the driver’s circumstances, the insurance company responsible for the vehicle involved in the accident is obligated to provide compensation.

The heirs of the deceased have the right to seek compensation from the insurance company to claim compensation, based on the nature of the accident and the damage sustained.  

However, it is important to differentiate between the insured individual, who is the policy holder and the one responsible for causing the accident, and the injured party, who is the individual who suffered harm in the accident.  If the driver who caused the accident was intoxicated or driving without a valid license, they are not entitled to any form of compensation.  On the other hand, the injured party, who sustained injuries because of the accident, has an inherent right under the policy to receive compensation from the insurance company.

However, the prevailing viewpoint suggests that the insurance company has the right to withhold compensation from both the at-fault driver (the insured) and the injured party.  It is argued that the culpable driver should bear the consequences of their actions, including the payment of blood money in the event of death or compensation for damages.

Nonetheless, most insurance experts assert that the insurance company bears the responsibility of compensating for damages and cannot avoid its obligations towards the injured person. The UAE legislators have established mandatory vehicle insurance regulations for the protection of third parties. Therefore, the injured person, or in the event of their death, their representatives, hold a legitimate entitlement and interest to pursue legal action against the insurance company and assert their rights. The insurance company cannot cite any exceptional conditions outlined in the insurance policy as a defense against the injured party.

Irrespective of the cause of accident, it is the insurance company’s responsibility to provide compensation to the injured person or the heirs of the deceased. Subsequently, the insurance company can pursue recourse against the driver responsible for the accident.

As per Article No. (1035) of Federal Law No. 5 of 1985 on Civil Transactions, amended by Federal Law No. 1 of 1987, “The obligation of an insurer under an insurance against civil liability shall only become effective when the injured party makes a claim against the beneficiary after the occurrence of the incident out of which such liability arose.”

 In the unfortunate event of a person’s death resulting from a driver’s error, the heirs of the deceased have the right to claim the appropriate blood money as prescribed by the law from the insurance company.  This entitlement exists independently from any financial and moral indemnity to which they may personally be entitled to.

It is important to note that the law allows filing a lawsuit against the insurance company without the need to initiate a lawsuit against the insured party (the at-fault driver). This is because the injured party’s lawsuit against the insured is based on tort liability, while their lawsuit against the insurance company is based on specific legal provisions law that permit the pursuit of compensation for the damage suffered.  This applies regardless of whether the insurance policy is comprehensive   or third-party coverage.  

 Upon review of the unified policy for vehicle insurance covering civil liability, issued under the Regulation of the Unified Motor Vehicle Insurance Policies, in accordance with Decision of the Insurance Authority Board of Directors No. 25 of 2016, the insurance company acknowledges and commits to providing compensation to the insured individual in the event of any damage to the insured motor vehicle.  This coverage extends to damages arising from the use or parking of the motor vehicle within the UAE during the insurance period.

The author of this article is Mahmood Shakir Al Mashhadani. Mahmood specialises in white collar crime and cybercrime in addition to wider criminal matters. He is also the author of “Organized Crimes” published by Dar Alnahda Al Arabia Egypt and Dar Al Nahda Alelmiya UAE in 2018. For any queries, please contact Mahmood directly.

Mahmood Shakir Al Mashhadani Senior Associate [email protected]