Possibility to cancel the mandatory motor insurance policy Compulsory insurance protects the insured and it makes him feel comfortable and not worried about
Possibility to cancel the mandatory motor insurance policy
Compulsory insurance protects the insured and it makes him feel comfortable and not worried about all accidents caused by his vehicle, Where it works to cover the damage caused by the non-affected of the traffic accident, It finds a solution and exit for all parties and as a result works to protect the community from the occurrence of disputes.
So insurance was mandatory for all vehicles moving on the roads, but could mandatory insurance be canceled?
The answer is in Federal Law No. 6 of 2007 regarding the establishment of the Insurance Authority and organization of its work in Article (9), which states:
” The Company or the Insured may not cancel the compulsory insurance contract for vehicles during the contract period if the license is valid unless another insurance contract is replaced “
The above article confirms the categorical prohibition of canceling the compulsory insurance contract by either party as long as the license of the vehicle is valid, Except in one case only, that is to replace the insurance contract, ie, if the owner of the vehicle contracts with another insurance company. The goal is not to leave the vehicle free of compulsory insurance. This is not strange, Because it’s called mandatory insurance.
In Article (9) also in the second paragraph was noted to another point:
” A compulsory vehicle insurance contract shall be canceled if the vehicle is completely damaged and its registration has been written off by the competent licensing authorities. “
This clause clarifies that the contract becomes canceled if the vehicle is completely damaged and its registration has been written off by the licensing authority. The insurance contract no longer has any consideration as long as the vehicle itself no longer exists as a result of its total damage.
The Licensing Authority is the competent authority in the Emirate to issue licenses for the driving, registration and operation of vehicles on public roads.
With regard to the settlement of the remaining financial matters between the insured and the insurance company, Has been clarified in the same article,which mentioned :
” The Insured may recover from the Company a sum of the insurance premium and commensurate with the remaining period of the Insurance Contract unless the Insured is caused in an accident that caused total damage, without prejudice to the third party’s fixed rights prior to the cancellation of the insurance contract “
According to the above, the insured has the right to recover a financial amount corresponding to the remaining period of the insurance contract, unless the insured is the cause of the traffic accident which caused damage to the vehicle.
In any case, the rights of third parties affected by the traffic accident are not prejudiced before the insurance contract is canceled. The insurance company is obliged to compensate him for the damage caused during the period of validity of the contract. This is the essence of compulsory insurance.
Mohamed Mahmoud Al Marzooqi law firm
Attorney / Mohamed Al Marzooqi
Mohamed Al Marzooqi advocates & Consultancy
Lawyer in Abu Dhabi, Dubai – UAE