Multiplicity Of Insurance Contracts The assured’s obligation to inform the other insurers upon knowing The multiplicity of insurance contracts is that the WhatsApp: +971555570005
The Multiplicity Of Insurance Contracts
The assured’s obligation to inform the other insurers upon knowing
The multiplicity of insurance contracts is that the insured –at the same time- conclude a multiple insurance contracts with different insurers in order to insure one thing against the same danger at the same level.
In other words the multiplicity of insurance contracts are conclusion of insurance contracts , that are in fact only copies of each other the only difference between them is the insurer or maybe the amount of insurance.
Meaning that the multiplicity of insurance contracts is a situation that requires the availability of specific conditions, so that each condition is necessary to achieve this situation, and these conditions are:
• Insurance contracts must be concluded with different insurers, if these contracts are concluded with a single insurer then all the contracts will be treated as single contract, and this would have been within the scope of over-insurance and not within the scope of multiplicity of insurance contract.
• The purpose of all contracts should be to insure one thing, if a contract was to insure something other than the one that the other contract insured, like if a person insured his home and in another contract insured his car, there would not be multiplicity of insurance contract, but separate insurance contracts.
• The insurance must be for one interest, if a person insured his house against fire and then the one who leased the house insured it against his responsibility if the house burnt, this case is not multiplicity of insurance contracts because each contract relates to an interest that is different from that of the other contract.
• Insurance must be against one risk, if a person insured his vehicle against fire, then insured it against theft .then against his liability for accidents, there is no multiplicity of insurance contracts, because each of the three contracts insures against a risk other than the risk from which the other two contracts insure against.
• The insurance must be for one time , if someone insured his crops against damage for one season ,and there was a previous contract with the same terms for the previous season ,there is no multiplicity of insurance contracts ,because the second contract does not coincide the first one but comes after it .
• Insurance must be at the same level, if two contracts are concluded one of which insures against risk to a certain point, and the other insures against the same risk beyond that point there is no multiplicity of insurance contracts, but there are two contracts one of which complements the other.
If these six points are achieved, there will be multiplicity of insurance contracts, and the multiplicity may be excessive and may not be, if the insurance total amount in multiple contracts exceeded the value of the insured object, the multiplicity will be excessive.
In all cases, the legislator requires the insured to inform the other insurers of the existence of multiplicity of insurance contracts ,the insurance documents usually includes conditions that stipulate that its obligatory to report when the insurers are multiple, and there is no specific form for such report but it is usually a letter accompanied by an acknowledgment of arrival, as well as it does not have a specific date, but only once the insured is aware of the multiplicity of insurance contracts. Because it is permissible for the insured to be ignorant of this multiplicity if it arises from the fact that another person has concluded an insurance contract on his behalf other than the insurance contract the insured has already concluded. And he notified him after a period of time, then he must inform each of the multiple insurers by the names of the other insurers and of the other amounts of insurance. Such notification shall be obligatory, whether the sum of the insurance amounts in the multiple contracts Exceeds the value of the insured object or not.
Thus, we have explained the concept of multiplicity of insurance contract and listed conditions for it to be fulfilled , the insured must hasten to inform the other insurers of its existence when he is aware of it, thus protecting himself from the possibility that insurers consider him bad-intentioned and conducted fraud with the aim of illegal gain, by receiving Insurance amounts from multiple insurance contracts, that totally exceed the value of the insured object.
Attorney / Mohamed Al Marzooqi
Mohamed Al Marzooqi advocates & Consultancy
Lawyer in Abu Dhabi, Dubai – UAE