UAE Law Protects Car Owners from Insurance Claim Delays for Total Loss Vehicles

Car owners in the UAE may be entitled to additional compensation if an insurance company delays settling claims for a total loss vehicle beyond the stipulated timeframe. The provisions under the Unified Motor Vehicle Insurance Policy Against Loss and Damage, issued by the UAE’s Central Bank, set clear obligations for insurance companies in such cases.

 

Replacement or Cash Compensation for Total Loss

In the event of a total loss due to an accident, the insurance company is required to replace the vehicle or provide an equivalent cash amount if requested by the insured. This requirement is outlined in Chapter Two, Article 2(c) of the Unified Motor Vehicle Insurance Policy. The insured's preference for cash compensation must be honored by the company.

 

Compensation Deadlines and Penalties

The law mandates that compensation for a total loss must be settled within 15 days of completing all required claim documentation. Article 7 of the Insurance Authority Board of Directors' Decision No. 25 of 2016 further specifies that if an insurer delays payment beyond this period without valid justification, it is liable to compensate the beneficiary for costs incurred due to the delay.

This includes:

1. Timely payment of compensation based on the policy terms within 15 days.

2. Additional compensation for expenses resulting from the lack of access to the vehicle during the delay.

3. Compensation calculated using the market value of the vehicle or based on evaluations from licensed showrooms.

    

Steps to Address Delayed Payments

If compensation is delayed, the insured should:

1. Contact the insurance company to request a detailed explanation for the delay.

2. Escalate the matter to the UAE Insurance Authority if the issue remains unresolved.

3. Pursue legal action in the relevant UAE court to seek further remedies if necessary.

 

Ensuring Compliance

The insurance law emphasizes strict adherence to timelines to protect the insured from financial losses. Failure to comply with these regulations exposes the insurance company to penalties and additional obligations to compensate for any inconvenience caused.

Car owners experiencing delays are advised to maintain detailed records of their claims and seek guidance from legal professionals or the UAE Insurance Authority to ensure their rights are protected.

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