Seven Mistakes That Could Nullify Car Insurance in UAE

Having car insurance is a long-term financial commitment. But the worst-case scenario to happen rather than canceling insurance claims is invalidation or nullification of car insurance.

The insurer can cancel the car insurance policy even if there is a slight unintentional slip-up. If not already lost money in premium payments, you might even be held liable to compensate for any repairs or damages out of your pocket.

Moreover, in UAE, there is a law that gives insurance companies the right to nullify the “own damage” section. The company can do so by giving the insured a prior 30 days notice of the same. The paid-up premium by the policyholder is to be refunded after the pro-rata premium for that period is deducted.

There could be many reasons why the insurance company invalidates a car insurance policy mid-term. But, without proper and active car insurance, you cannot drive one in UAE. If someone attempts to do so, it means a breach of law.

So, here we will see seven mistakes that could lead to the nullification of car insurance in UAE.

1. Insurance fraud

Fraud, dishonesty, and misinformation are few top reasons why so many car insurance policies remain terminated. Auto-insurance fraud is also a big problem where unsuspecting victims are targeted by fraudsters on the road. For instance, while getting car insurance, you tell the insurer that you have a driver, whereas you do not have one. This depicts that you have committed insurance fraud. One might even have to pay higher premiums than usual.

Moreover, car insurance fraud comes under the Federal Criminal Code of offense.

2. Violating traffic rules

Regularly violating traffic rules could end up in the termination of your car insurance policy. Few ways that include under traffic rule violation are:

  • Driving under the impact of drugs, alcohol, or even fatigue.
  • Driving below the speed limit.
  • Throwing litter from the car.
  • Overtaking other vehicles.
  • Involvement in promotional events without permission.
  • Driving without a proper license.

Such activities could lead to the invalidation of your car insurance policy.

3. Non-disclosure of car modifications

Car modifications can affect the premium, safety, and performance of the car insurance policy. So, when you decide to get your car insured, do provide all the necessary details of any car modifications. This would allow the insurance company to revise the insurance quote. If you fail to inform the insurer about the same, they can nullify your policy.

4. Leaving the car unlocked

Many car owners and drivers could be unaware of the problem relating to leaving the car unlocked. This indeed increases the risk of car theft but also risks car insurance coverage. Moreover, the insurer will not be liable to pay for any damages caused to the car after being left unlocked. It is primarily driven by negligence. This could, in turn, lead to the cancellation of the policy.

Therefore, in many countries, it is now illegal to leave the car unlocked. Many car insurance companies in Dubai also agrees with it as a mistake made by drivers.

5. Renting the car to someone

The insurance company demands only the policyholder to drive the insured vehicle because what if the car gets into an accident after you have rented the insured vehicle to your friend. In such cases, the insurance company will not be liable to bear the damages.

In fact, you might end up with an offense for violation of insurance regulations resulting in termination of the car insurance policy. The breach of policy is identified because you opted for the insurance for a private use vehicle.

6. Policy norms violations

There are several factors that insurance companies count on while determining the car insurance premium. And these premium amounts differ by vehicle usage (whether for business use or solely private).

Usually, the quotes for commercial insurance policies remain at a higher range than the private insurance policies. That’s why many vehicle owners opt for personal policies due to low premiums but use the exact vehicle for commercial purposes. This act is considered a violation of the insurance policy norms and is also illegal. And if it occurs any accident during the commercial activity, the insurance company won’t cover it. But, it could further nullify the insurance policy.

7. Default in car maintenance

Whether a policyholder or not, it is the responsibility of the car owner to do proper maintenance. Even if you lease out the insured vehicle for some other purposes, the policyholder is still liable for the care and repairs of the car.

The car insurance will be nullified if:

  • Policyholder neglects the regular maintenance.
  • Fails to follow up the safety measures in time.
  • Keeps the vehicle in non-roadworthy condition.
  • Malfunctions and glitches are not fixed instantly.

Non-maintenance of the vehicle could eventually lead to accidents and even unfortunate deaths. And the primary cause of this effect is not liable to the insurance company.

Few other reasons that might end up with an invalid car insurance policy include using a middle-man for car services, not in touch with the insured, driving on roads not fit for the vehicle, etc.