Compulsory vehicle insurance, and the right of the injured person to request compensation directly from the insurance company
The UAE legislator adopted the compulsory insurance system for motor vehicles through Federal Law No. 21 of 1995 and its executive regulations, called the Traffic Law. This law regulates the movement of vehicles and cars of all types.
Article (26) of this law stipulates that:
To license any mechanical vehicle, or to renew its license, in accordance with the provisions of this law, it is required that it be insured for the benefit of at least third parties.
Anyone who suffers physical damage due to the use of the vehicle may seek compensation directly from the insurance company, as the executive regulations of the Traffic Law have confirmed that the insurance company does not insure the vehicle. The vehicle must include in the insurance policy any condition that reduces or prevents coverage of its full civil liability arising from death, physical injury, or material damage.
The purchaser of the vehicle must also, upon registering its ownership, submit a new insurance policy whose duration is consistent with the license period. This is what is stated in the Traffic Law regarding insurance. Regulating and supervising the insurance sectors is the task of the Central Bank of the United Arab Emirates after the Insurance Authority was merged with the Central Bank pursuant to Federal Law No. 25 of 2020.
The Central Bank of the United Arab Emirates undertakes the task of regulating and supervising the insurance sector in a way that ensures providing the appropriate climate for its development and protecting the rights of the insured and beneficiaries. Among the insurance work and monitoring the financial solvency of insurance companies to provide sufficient insurance cover to protect these rights, and work to advance the performance and efficiency of insurance companies and determine the risks in which insurance should be compulsory.
The Insurance Authority issued Resolution No. 52 of 2016 regarding issuing a system for unifying vehicle insurance policies, This is by obligating insurance companies to issue a vehicle insurance policy against civil liability, and a vehicle insurance policy against loss and damage attached to the decision, and through them, the insurance company is obligated, in the event of an accident resulting from or resulting from the use of the vehicle, to compensate the injured third party within the limits of its responsibility stated in the insurance policy for all amounts that the insured or the driver of the vehicle is legally obligated to pay it as compensation for death or any physical injury, as well as damage to objects and property.
Thus, the injured person has an intrinsic right originating in the law that provides him with the capacity and interest to file his claim against the insurance company insuring the vehicle that caused the traffic accident and demand compensation from it. For the physical injuries or material damage he sustained, the insurance company that insured the vehicle that caused the accident has no right to protest against the injured person with the exceptional conditions that exclude its responsibility for covering the damages that resulted from the use of the insured vehicle in accordance with the insurance contract, considering that the injured person is a third party and derives his right from the law.
However, the insurance company with which the vehicle is insured may adhere to these exceptions before the insured in compliance with the provisions of the existing contractual relationship between them.
For further guidance and information on the application of the discussed law in the UAE, it’s advisable to consult with experienced lawyers in Dubai who are well-versed in Traffic Law. At our Dubai law firms, we can provide you with the expertise needed to navigate these laws and ensure compliance, helping you for the right of the injured person to request compensation directly from the insurance company. Please get in touch with Al Dhaheri International Advocates & Legal Consultants using the contact details listed on our website.
Written by Senior Legal Counsel Mr. Bahaa El Sharkawy
