contract of Insurance in UAE is a contract whereby both the insured and the insurer cooperate together to face the risks or accidents insured against and, whereby in consideration of a specified amount or periodical premiums, the insurer undertakes, upon the occurrence of the event or the risk specified in the contract, to pay to the insured or the beneficiary a sum of money, an annuity or any other pecuniary right.
The law regulates the insurance organization, namely as concerns their legal forms, method of formation, means of performing their activities, and supervision thereon, in order to achieve the cooperation aims of insurance without prejudice to the mandatory provisions and fundamental principles of Islamic Sharia.
Until the enactment of the law referred to in the above clause, shall remain in force, the rules and conditions actually observed concerning insurance and insurance organizations.
The following conditions in a policy of insurance are void:
a) The condition providing for the forfeiture of the right to insurance on account of a breach of the laws, unless such breach constitutes a deliberate felony or misdemeanor;
b) The condition providing for the forfeiture of the insured’s right due to his delay in notifying the authorities that have to be notified, or in producing documents, if it appears that the delay was for an acceptable excuse;
c) Any printed condition relating to cases involving nullity of the contract or forfeiture of the insured’s right, which is not shown in a clear manner;
d) The arbitration condition included in the printed general conditions of the policy and not as a special agreement distinct therefrom;
e) Any arbitrary condition, the breach thereof appears that it has no bearing on the occurrence of the event insured against.
Obligations of the Insured
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The insured is bound to:
a) Pay the agreed amounts on the term fixed in the contract;
b) Reveal at the time of conclusion of the contract, all information which the insurer consider of importance to be known by him in order to assess the risks covered by him;
c) Inform the insurer of all matters, occurring during the contract period, which lead to the aggravation of risks.
If the insured, in bad faith, conceals a matter or makes a false statement in such a manner as to lessen the importance of the risk insured against, or leads to a change in its object, or if he fraudulently breaches his promise to fulfill an obligation, the insurer is entitled to demand rescission of the contract and be paid all premiums due prior to such demand.
In the absence of fraud or ill faith, the insurer, upon demanding rescission, has to refund to the insured all premiums paid by him or the portion thereof for which he assumed no risk at all.
Obligations of the Insurer
The insurer is bound to pay the insured amount or the sum due to the insured or the beneficiary, as agreed, upon occurrence of the risk or maturity of the period fixed in the contract.
Insurance covering tort liability shall have no effect unless the victim files a claim against the beneficiary after the occurrence of the event from which resulted such liability.
Actions arising out of insurance contracts shall be barred by limitation after the expiration of three years from the date of the occurrence which gave rise to such action, or of the knowledge of the interested party of its occurrence.
This period, however, shall only run, in the event of concealment by the insured of the information relating to the risk insured against, or submission of incorrect statements, as from the date the insurer has taken knowledge thereof.
In insurance claims, it is important to understand the obligations of the parties and act in a timely manner.
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a contract of insurance establishes a cooperative alliance between the insured and the insurer to confront insured risks or accidents. This collaboration involves the insurer committing to provide monetary compensation upon the specified event’s occurrence, supported by agreed premiums.
The legal framework ensures the harmonious functioning of insurance entities while upholding fundamental principles of Islamic Sharia. Existing regulations persist until new laws come into play, and certain void conditions within insurance policies are outlined. Both parties have obligations: the insured must act transparently and report risk-aggravating matters, while the insurer is obligated to honor payment commitments. Adherence to these responsibilities is paramount for a successful insurance claim process.