Basics of Motor Insurance

1. Motor Insurance
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2. The Policy:
Please Cooperate and Ensure!
Share your
thoughts !

3. Lets know each other
.
* Your Name and Origin
* The Company you work for
* Your current position
* Experience in the current position
* Total No of years in the Insurance Industry
* The reason for choosing this program is…
* Where do You want to be 5 years from today?

4. What is Insurance?
Protection against a potential financial loss –
issued by an insurer to the insured in consideration of
payment (Premium)

5. Important Insurance Terms
⬜ Insurer
⬜ Insured
⬜ Insurance Policy
⬜ Broker
⬜ TPA
⬜ Insurable Interest
⬜ Underwriting
⬜ Benefits
⬜ Exclusions

6. Important Insurance Terms
⬜ Deductibles
⬜ Clauses
⬜ Claims
⬜ Renewals
⬜ Surveyors and Loss Adjusters
⬜ Re Insurance
⬜ Regulators
⬜ Legal Age

7. Important Insurance Terms
⬜ Arbitrators (independent person or body officially appointed to settle a dispute)
⬜ Sum Insured
⬜ Premium
⬜ Recovery Claims
⬜ Addition/Deletion
⬜ Misrepresentation
⬜ Frauds and Abuse
⬜ Subrogation(Transferring rights to pursue a third party that caused an insurance
loss to the insured)
⬜ Third Party Losses

8. Types of Insurance
General
Insurance
Motor
Fire
Marine
Third Party Liability
Workmen
Compensation
Plant & Machinery
Fidelity Guarantee and many
more
INSURANCE

9. INSURANCE HISTORY
Modern Insurance started from the 16th century in the U.K.
The concept of Insurance initially started from Marine Insurance.
The traders in London started the idea of transporting goods/ items on big
wooden boats/Dhows to carry them to France or other European countries.
The voyage of the sea say from London to France was not that easy,
sometimes the sinking of a boat into the sea in rough weather ultimately
resulted in a big loss for the Traders/Merchants as well as to the boat owners.
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10. INSURANCE HISTORY
The Traders/Merchants and Business Tycoons and Lawmakers decided to
contribute some money proportionate to the value of goods at the Port for
the sea perils/accidents and if any boat sank along with the goods. Then the
party at loss was compensated from the funds collected and it sometimes
happened that there were “NO ACCIDENTS” and the funds were accumulated
for future losses.
Like this the traders and Business Tycoons in collaborations with merchants
and Bureaucrats met Mr.Edward Lloyd at the coffee shop at London and
formed Lloyd’s of London.
In 1901 the Lloyd’s of London Underwriters formed London Insurers and
after 5 years in 1906 the Marine Insurance Act 1906 was formed relating to
MARINE INSURANCE. The Marine Insurance contact was formed by Lloyd’s
and Underwriters, which means the CONTRACT BETWEEN INSURER AND
INSURED AGREES/UNDERTAKES to INDEMNITY THE INSURED FOR
LOSS/DAMAGES TO THE PROPERTY AGAINST MARINE LOSSES and this
CONTRACT was termed 10

11. MOTOR INSURANCE HISTORY
After Marine insurance the need arose for Motor insurance
as it is one of the most prevalent Insurance lines in the whole
world.
It is the 2nd oldest Insurance after Marine Insurance which started in 1639.
Since then the automobile sector got great prominence in business, owing it
to great demand of motor vehicles in almost every country of the world.
Since the motor industry flourished and vehicles such as Auto cycle,
Motorcycle, Cars, Buses, Vans started manufacturing owing to high demand
in the world market, so from ordinary to high class vehicles, mainly motor
cycles and cars, were being used by different classes of people in almost
every country of the world. Roads and bridges were made, refined, widened
and modified as the flow of traffic started increasing day by day, and
consequently accidents started occurring from minor to major, involving
vehicles/bodily injuries/death and property damages.
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12. NEED FOR MOTOR INSURANCE
In the early 19th century there was no Motor Vehicle Act,
so disputes were settled either by Bureaucrats or the Head of Society or
Local Officials/Head of States.
As the No. of Accidents was increasing day by day, the parliament in the U.K.
first made an Act in 1930 called RTA Act 1930 and then in Ireland the State
Government Tribunal Courts made a law in 1933 for compulsory motor
insurance.
The U.K. Government, in collaboration with the Lloyds of London, made one
Law in 1939 that ANY VEHICLE PLYING ON THE ROAD MUST COVER
LOSS/DAMAGES TO THE PROPERTY AND DEATH/BODILY INJURIES TO THE
THIRD PARTY and the Act was passed in London and it was called the Motor
Vehicles Act 1939.
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13. MOTOR INSURANCE GROWTH
Slowly and steadily all the other countries in the world (e.g. Australia,
Canada, Hungary, Romania, South Africa and USA)
acted and abided by this Act for the safety of life and property of others on
the public roads and hence, the Insurance Companies in almost all the
countries in the world followed the procedure for the drafting of Motor Third
Party Policy which promises to indemnify the Insured for loss/damages to
life/property of third party as a result of collision or due to negligent driving
of the other on a public road.
The Insurance Companies drafted the Policy called Motor Vehicle Insurance
or Auto Insurance or Car Insurance.
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14. MOTOR INSURANCE PRODUCTS
Initially it was started as THIRD PARTY COVER damages only
excluding damages to owner’s vehicle and later on another cover
was formulated to cover damages to Insured’s own vehicles
being driven & damages to be covered whether by the insured’s
negligence or by others. This cover was named as
“MOTOR COMPREHENSIVE COVER” which was to cover the losses
of owners’ vehicles.
The own damages to the Insured vehicles was covered
irrespective of the fact whether it was Insured’s fault or not.
Hence, the PURPOSE OF MOTOR INSURANCE was needed to cover
damages to third party and own damages of Insured’s car,
property and life of third party.
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15. UAE UNIFORM
MOTOR VEHICLE POLICY
AGAINST LOSS, DAMAGE
AND THIRD PARTY LIABILITY
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16. Motor Insurance In UAE
There are 5 types of car insurance policies in the UAE:
⬜ Third Party Liability Policy: This is a basic coverage that is mandatory by UAE law. It covers death or bodily injury to
any third party including property damage caused by the insured party’s vehicle. This policy however does not cover
any loss or damage to insured own vehicle unless the blame lies on the other party in which case you will have to claim
from their insurance provider. There is also no claim for fire and theft.
⬜ Third party, Fire & Theft Policy: Same as the one above except this covers Theft and Fire damage/loss as well.
⬜ Comprehensive/Fully Comprehensive (Basic) Policy: This covers you against third party loss/damage as well as your
own. Damage/Loss can occur due to fire, burglary, external explosion, accidental collision, lightening, self igniting, theft
and even if a third party commits a malicious act. A legal obligation exists for insurance companies to provide this policy
at a maximum price of 3%-5% of the car value. This type of policy must be thoroughly read so as to be aware of the
restrictions and/or loopholes in it.
⬜ Comprehensive Policy with Options: This covers all of the above and provides you options to get extra care. For an
extra cost, you can avail options such as dealer repair, free hire car, recognition of no-claim bonuses and free insurance in
GCC countries. Estimated payment is 3%-10% of the car value which depends on the company and if no-claim bonus is
availed.
⬜ Comprehensive (Premium Level) Policy: This is the most expensive option and not even offered to everyone; only
selected clients can avail this package by paying 1% or 2% extra. It covers claims of other people if their car is damaged
by you plus your own accidental damage to your own car.
Let us take a look at the assessment criteria for premiums.
⬜ Age: Under 25 years old male drivers are subject to a higher insurance rate, since they are regarded as risky drivers.
Female drivers of the same age and male drivers above 25 are not subject to this.
⬜ Car: The insurance rate will depend on the car’s brand, model and make. Some cars cost more to insure if they have a
reputation to be involved in a number of accidents. Cars older than 5 years, plus Sports and luxury cars are very
expensive and/or difficult to get insured.
⬜ Keeping all of these factors in mind, an informed decision should be taken regarding the policy to be availed. You may
know that it is a statutory requirement in the UAE to have your car insured, so choose wisely and drive safely.
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17. Introduction
⬜ Whereas the Insured has applied to ………………..
Company (hereinafter referred to as the "Company") for the
insurance set herein below, and has agreed that the
application is considered as the basis for and integral part
of this Policy, and has paid or agreed to pay the applicable
premium, and the Company has accepted and represented
to pay compensation to the Insured in case of any damage
to the Motor Vehicle subject to this insurance, whether it
emerges from the use or parking of the Motor Vehicle in the
UAE during the insurance period, whether the Insured
caused the accident or was an injured party;
⬜ Therefore, this Policy was entered into to cover the
damages that befall on the Insured Motor Vehicle in the
UAE during the insurance period according to the terms,
conditions and exclusions in or appended to this Policy.
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18. Introduction
⬜ Whereas the Insured has applied to ……………….. Company (hereinafter
referred to as the "Company") for the insurance set herein below, and has
agreed that the application is considered as the basis for and integral part of
this Policy, and has paid or agreed to pay the applicable premium, and the
Company has accepted and represented to pay compensation to a Third
Party/ Injured Party in case of any accident subject to this insurance,
whether it emerges from the use or parking of the Motor Vehicle in the UAE
during the insurance period;
⬜ Therefore, this Policy was entered into to cover liability towards a Third
Party / Injured Party caused by the Insured Motor Vehicle to the Third
Party / Injured Party according to the terms, conditions and exclusions in or
appended to this Policy for the amounts the Insured or the Motor Vehicle
Driver must pay against:
⬜ - Bodily Injury to a Third Party, either inside or outside the Motor Vehicle.
⬜ - Property Damages to a Third Party.
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19. Section One
Loss or Damage-1
A. Loss or Damage
1. The Company undertakes to indemnify the
Insured for Loss of or Damage to the Insured
Vehicle, its accessories and spare parts whilst
thereon:
◼ by accident or accidental collision or overturning
consequent upon mechanical breakdown or
consequent upon wear and tear
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20. Section One
Loss or Damage-1 (continued)
A. Loss or Damage
◼ by fire, external explosion, self-ignition, lightning or
thunderbolt
◼ by burglary or theft
◼ by malicious act of any third party
◼ whilst in transit (including the process of loading
and unloading incidental to such transit) by road,
rail, inland waterway, lift or elevator, relating to the
said transportation
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21. Section One
Loss or Damage-1
The Company shall pay in cash the amount of loss or
damage to the Insured or shall repair, reinstate or
replace the motor vehicle or any part thereof including
its accessories or spare parts and the liability of the
Company shall not exceed the replacement value of
the parts lost or damaged and the reasonable cost of
fitting or fixing such parts, unless the Insured requests
the Company to pay him the amount in cash, in this
case the Company shall respond to the Insured’s
request.
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22. Section One
Loss or Damage-2
The Insured has the right to repair the damage
due to an accident covered under the Policy
provided the total cost of such repair does not
exceed the Authorized Repair Limit mentioned in
the Schedule attached to this policy, and the
Insured should forward to the Company without
delay a detailed estimate of the cost.
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23. Section One
Loss or Damage-3
If the insured vehicle sustains loss or damage to the
extent that the repair cost shall exceed 50% of its value
at the time of accident and Is considered a Total loss,
then the Insured’s Estimate of value, which was
declared between the Insured and Company at the
time the Insurance Contract had been entered into and
the Policy-Schedule had been signed, shall constitute
the basis for calculation of the indemnity…..
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24. Section One
Loss or Damage-3
for the loss or damage after deducting a depreciation
@20% per annum of the Insured Value as stated in the
Schedule for the first year of the vehicle’s life on the
road, while for a part of the year this shall be
calculated on a pro rata basis.
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25. Section One
Loss or Damage
From the second year of the life of the vehicle from the
date of its registration as new, a depreciation rate not
exceeding 20% shall be deducted from the vehicle’s
ensured Value as stated in the depreciation will be
calculated as follows.
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26. Section One
Loss or Damage
A. 5% as from the beginning of the 1st month until
the end of the 3rd month.
B. 10% as from the beginning of the 4th month until
the end of the 6th month.
C. 15% as from the beginning of the 7th month until
the end of the 9th month.
D. 20% as from the beginning of the 10th month until
the end of the 12th month.
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27. Section One
Loss or Damage-4
If the motor vehicle is immobilized by reason of loss
or damage insured under this Policy the company will
bear the reasonable cost of protection and removal to
the nearest repairers and delivery to the garage within
the country where the loss or damage was sustained.
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28. 1. Consequential loss affecting the Insured Vehicle or
decrease in the vehicle’s value through usage,
impairment or failure or breakdown of mechanical
or electrical equipment.
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Exceptions :-
The Company shall not be liable to pay any compensation in
respect of:

29. Exceptions :-
The Company shall not be liable to pay any compensation in
respect of:
2. Damage resulting from overloading or carriage at any
one time of a greater number of passengers than the number for
which the Vehicle is licensed by the concerned authorities,
provided that the over-loading or excess passengers were the
cause of the accident which resulted in the loss or damage to the
motor vehicle.
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30. Exceptions:-
The Company shall not be liable to pay any compensation in respect
of:
3. Damage to tires, unless it occurs at the same time as the damage to the
Insured vehicle.
4. Loss and damage caused to the Insured Vehicle as a result of the following :
a) use for purpose otherwise than in accordance with the Limitations of
Use.
b) violation of the law if it involves a criminal act or similar willful act.
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31. Exceptions:-
The Company shall not be liable to pay any compensation in respect
of:
5. Damage resulting to the motor vehicle from
accidents which occur while it is being driven by an
unlicensed person.
6. Loss or damage to the motor vehicle or any part
thereof arising out of any accident occurring due to its
being driven whilst under the influence of drugs or
alcohol.
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32. Section Two
Third Party Liability -1
The Company shall be liable to compensate the
Insured in the event of accident caused by or
arising out of the use of the motor vehicle subject
to the limits specified in this Policy against all
sums which the Insured shall become legally liable
to pay as compensation for:
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33. Section Two
Third Party Liability -1-a
A- Death of or bodily injury to any person including the
passengers in the vehicle except the Insured or the
driver at the time of the accident and their families-
spouse, parents and children and the employees of the
Insured if they are injured during work hours or as a
result of their work, and they are to be considered as
passengers whether inside the vehicle or mounting or
dismounting from it
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34. Section Two
Third Party Liability -1-b
B - Damages for materials and property, except those
owned by the Insured or the driver at the time of the
accident or property held in trust or in their custody or
control.
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35. Section two
Third Party Liability-2
2- The insurance mentioned in this Section is
extended. In accordance with the provisions and
conditions herein, to cover the liability of each
licensed driver while driving the Insured Vehicle
provided that he fulfills and complies with the
Terms and Conditions of this Policy and obeys it
as if he was the Insured himself.
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36. Section two
Third Party Liability-3
3- Subject to the Limits specified in the attached
Schedule to the Policy, the Company shall be liable
to pay court orders or judgments in whatever
amount awarded to the plaintiff including judicial
expenses and charges (except penalties and/or
fines) : the Company shall pay compensation to
the rightful claimant.
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37. Section two
Third Party Liability-4
4- In the event of death of any person entitled to
indemnity under this Section the Company will in
respect of the liability towards such person
indemnify his heirs in accordance with the terms,
Conditions and Exceptions of this Policy, provided
that such heirs shall as though they were the
Insured observe, fulfill and be subject to the Terms
of this Policy in so far as applicable.
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38. Section two
Third Party Liability-5
5- In the event of any accident involving indemnity under
this Section to more than one person the Limits of Liability
specified in the attached Schedule to this Policy shall apply
to the aggregate amount of indemnity due to all persons.
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39. Section two
Third Party Liability-7
7- Undertakes to defend the Insured at any inquest or
inquiry in respect of any accident which may be the
subject of indemnity under this Section, and
undertakes to defend the Insured in any Court of
Law in respect of any event which may be the
subject of indemnity under this Section.
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40. General Exception
1
1. This Policy does not cover loss or damage or Third
party Liability arising from accidents involving the
Insured Vehicle in the following cases.
a) Accidents which take place outside the Geographical
Area specified in this Policy.
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41. General Exception
b) Accidents which happen directly or indirectly,
proximately or remotely occasioned by, contributed to by or
traceable to or arising out of or in connection with flood, storm,
hurricane, volcanic eruption earthquake or other convulsion of
nature, invasion, act of foreign enemies, hostilities or warlike
operations, whether war be declared or not.
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42. General Exception
(continued)
Civil war, strike, riot, civil commotion, mutiny, rebellion,
revolution, insurrection, military or usurped power,
confiscation or nationalization or ionizing radiation
contamination by radioactivity from any nuclear fuel or from
any nuclear waste from the combustion of nuclear fuel-
direct with any of the aforementioned cause.
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43. General Exception
2
a) Accidents Involving the insured or any driver of a
vehicle whilst driving the vehicle outside the public
road as per the definition of road as every passage open
to public traffic unless otherwise been agreed in the
insurance policy.
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44. General Exception
2
b) This insurance does not cover any liability due to an
agreement made by the Insured where no liability
would arise but for that agreement.
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45. General Conditions -1
The Policy and the Schedule shall be considered as one
contract and any word or expression to which a
specific meaning has been attached in any part of the
Policy and Schedule shall bear such specific meaning
wherever it may appear.
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46. General Conditions -2
Every notice or communication to be given or made under
this Policy shall be delivered to the Company in writing.
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47. General Conditions -3.A
The Insured shall take all reasonable steps to safeguard the
Insured Motor Vehicle from loss or damage and to
maintain the Insured Motor Vehicle in a roadworthy
condition. The Company shall have at all times the right to
free and full access to examine such motor vehicle or any
part there of.
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48. General Conditions -3.B
In the event of any accident or breakdown such motor vehicle
shall not be left unattended without proper precautions being
taken to prevent further loss or damage and if such motor
vehicle be driven before the necessary repairs are effected, any
extension of the damage or any further damage to such motor
vehicle shall be excluded from the scope of indemnity granted
by this Policy.
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49. General Conditions -4
The Insured shall remain throughout the validity of this
Policy the sole and absolute owner of the motor vehicle and
shall not make any agreement of let out upon hire the
Insured Vehicle or enter into any agreement restricting his
absolute control and possession of the Insured Vehicle
without the written permission of the Company having first
been obtained.
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50. General Conditions -5.A
In the event of any occurrence which may give rise to a
claim under this policy, the insured shall give immediate
notice to the competent authority and the insurance
company, with all relevant information. The insured shall
forward to the company every letter, claim writ, summons
and process immediately on receipt
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51. General Conditions -5.B
Notice shall also be given to the Company Immediately the
insured has knowledge of any impending prosecution or
investigation into a fatal accident in connection with any
such occurrence.
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52. General Conditions -5.C
In case of theft or other criminal act which may give rise
to a claim under this Policy, the Insured shall give
immediate notice to the Police and co-operate with the
Company in securing the conviction of the offender.
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53. General Conditions -6.A
No admission offer promise or payment shall be made by or
on behalf of the Insured without the written consent of the
company which shall be entitled, if it so desires, to take over
and conduct in the name of the Insured the defense or
settlement of any claim
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54. General Conditions -6.B
Also to prosecute in his name for its own benefit
any claim for indemnity to damages or otherwise
and shall have full discretion in the conduct of any
proceedings and in the settlement of any claim and
the Insured shall give such information and
assistance as the Company may require.
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55. General Conditions -7.A
At any time after the happening of any event giving rise to a
claim or series of claims under Clause 1(b) of Section Two of
this Policy, the Company may pay to the Insured the full
amount of the Company’s liability under the above
mentioned clause and relinquish the conduct of any defense,
settlement or proceedings.
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56. General Conditions -7.B
The Company shall not be responsible for any
damage alleged to have been caused to the Insured
in consequence of any alleged action or omission of
the Company in connection with such defense,
settlement or proceedings, or of the Company
relinquishing such conduct.
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57. General Conditions -7.B
Also the Company shall not be liable for any costs
or expenses whatsoever incurred by the Insured or
any claimant or other person after the Company
shall have relinquished such conduct.
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58. General Conditions -8.A
The Company may cancel Section One of this Policy
sending thirty days’ notice by registered letter to the Insured
at his last known address and in such event the Company
will return to the Insured the premium paid less the pro-rata
portion thereof for the period the Policy has been in force.
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59. General Conditions -8.A
(continuation 8.A )
The Insured may cancel Section One on seven days written
notice and provided no claim has arisen during the current
Period of Insurance, the Insured shall be entitled to a return
of premium less premium at the company’s short period
rates for the period the Policy has been in force.
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60. General Conditions -8.B
Neither the Company nor the insured has the right to cancel
Section Two of this Policy during its period of validity as long
as the Vehicle’s license is valid. In case the Policy is cancelled
before its expiry date because of cancellation of the vehicle’s
permit, or presentation of a new Policy due to change in
details of the Vehicle or transfer of its ownership.
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61. General Conditions -8.B
(continuation 8.B)
The insurance company will refund to the insured the paid
premiums less the short period premium due, provided no
other claim has arisen during the validity of the policy. The
company shall pay to the insured, in all cases or
cancellation, the balance premium due prior to expiry of
notice period.
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62. General Conditions -9
If at the time when any claim arises under this Policy there
be any other Insurance covering the same loss, damage, or
liability, the Company shall not be liable to pay or
contribute more than its ratable proportion of any such loss
or damage compensation or costs or expenses.
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63. General Conditions -10.A
The due observance and fulfillment of the Terms and
Conditions of this Policy insofar as they relate to anything to
be done or not to be done by the Insured and the truth of all
statements and declarations expressed by the Insured in the
Proposal shall be conditions precedent to any liability of the
Company to make any payment under the Policy.
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64. General Conditions -10.B
Furthermore any notice of claim is to be fully in accordance
with the requirements of Clauses 2 and 6 of the General
Conditions of this Policy.
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65. General Conditions -11.A
1. The Company may claim back the value of what has been
paid as compensation by the Company in the following
cases:
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66. General Conditions -11.A
2. If it is proved that the insurance contract has been
made on the basis of false statements by the Insured or
if he has concealed relevant information which affects
the acceptance of this insurance by the Company; or
otherwise affects the Premium or the Terms of this
Policy.
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67. General Conditions -11.B
1. Using the motor vehicle for other purposes than
stipulated in the Policy or exceeding the permitted
number of passengers, overloading more than the
permitted limit, or the load not stowed correctly, or
exceeding the dimensions of width or length or height
permitted.
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68. General Conditions -11.B
2. The Policy and the Schedule shall be considered as one
contract and any word or expression to which a specific
meaning has been attached in any part of this Policy and
Schedule shall bear such specific meaning wherever it may
appear.
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69. General Conditions -11.C
1. If the Driver disobeys the law involving a criminal act
or felony.
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70. General Conditions -11.D
If the driver of the vehicle whether the insured or person
driving with his permission has no driving license for the
type of the vehicle involved as per the traffic and roads
Act and its regulation or an order has been delivered to
cancel the license provided to him by the court or the
competent authority or as per the traffic regulations.
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71. General Conditions -11.E
If it is proved that the accident, death or bodily injury
has resulted from an intentional act by the Insured.
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72. General Conditions -11.F
If it is proved to any of the competent authorities or
upon the admission of the driver of the vehicle that the
accident occurred as a result of the vehicle being driven
by the insured or any other person driving with his
consent under the influence of drugs affecting his ability
to control the vehicle.
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73. General Conditions -12
Nothing in this policy or any endorsement on it will affect
the rights of any person entitled to compensation by virtue
of this Policy or any other person’s right to recover any due
amount by virtue of the law.
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74. General Conditions -13
Any claim under this Policy shall be time barred if not
submitted to the Company within 24 to 48 hrs. from the
date of accident; even no claim will be accepted.
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75. General Conditions -14
It is possible that the Company and the Insured by virtue of
additional endorsement attached to this Policy and within
the limits of its provisions and conditions, agree that the
Company will cover other damages and injuries which are
not mentioned in this Policy especially the following:
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76. General Conditions -14/1
⬜ Insurance against accidents which may occur to the
Insured or his family and the driver at the time of
accident and persons working for the Insured, including
the medical expenses due to bodily injury to any one of
them.
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77. General Conditions -14/2
Insurance against damage of property owned by
the Insured or the driver at the time of the
accident or whatever is under their custody and
control.
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78. General Conditions -15
1. Any dispute arising out of this Policy falls within the
jurisdiction of United Arab Emirates Courts.
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79. UAE Motor Insurance Law
Changes
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•Sheikh Fahim bin Sultan Al Qasimi, UAE Minister of
Economy and Commerce, has amended clauses
concerning uniform motor insurance policy against loss,
damage and third party liability under the Ministerial
Resolution No. 28 of 2002.
•Under the resolution, the first paragraph of clause one
has been amended so that the insurance company
indemnifies the insured for the loss of or damage to an
insured vehicle in an accident.

80. UAE Motor Insurance Law
Changes
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•The second paragraph of the same clause has been
amended and reads as follows:
•"The insurance company shall pay in cash the
amount of loss or damage to the insured; or repair,
resort or replace the motor vehicle or any of its part
including accessories and spare parts, provided that
the liability of the company shall not exceed the
replacement value of the parts lost or damaged and
reasonable cost of fixing of such parts, unless the
insured requests the company to pay the amount in
cash to him, in which case the company shall respond
to the request of the insured.

81. UAE Motor Insurance Law
Changes
17/04/2017 81
•"In case the insured wishes to have new parts fixed in
place of those damaged as a result of the accident, or
to pay the value in cash, excluding taxis and vehicles
belonging to car-rental companies,
•the insured shall bear the depreciation values
detailed in the schedule (1) and as to the excluded
categories the depreciation rates detailed in schedule
(2) shall apply."

82. UAE Motor Insurance Law
Changes
17/04/2017 82
•The eighth clause of the uniform motor policy has been further
amended under the ministerial resolution to stipulate that an
insurance company may cancel section one of the policy, relating
to loss and damage, for valid reasons under a 30-day prior notice to
the insured by sending a registered letter to the insured, notifying
him of the reasons of the cancellation.
•In that case the company should refund the premium to the
insured less the pro-rata portion for the period during which the
policy was in force. Similarly, the insured may cancel the section by
giving a prior seven-day notice through a registered letter,
provided that no claims have been made during the current period
of insurance. (The Khaleej Times)

83. Motorcycles
⬜ While Ali’s friend
was riding the
motorcycles he
accidentally hit the
pavement causing
extensive damage to
the motorcycles
worth of AED500.
Will Ali’s CMP
indemnify Ali for this
loss?
17/04/2017 83

84. “Driver’s Policy”
⬜ This policy covers any
motorcycles the insured
owned provided that
they do not exceed a
specified C.C. It also
cover the liability of the
insured while driving
any motorcycles
regardless its C.C. But
excludes liability when
the insured drives a
motorcycles belonging
to his employer.
17/04/2017 84

85. MOTOR INSURANCE PREMIUM
CALCULATION
- Premium is the consideration to be paid or agreed to pay to the Insurance
Company following which the contract of Insurance (Policy) is issued.
It is a regulation & pre-condition throughout the world before issuance of
policy, that the premium for coverage must be paid to get the policy issued,
but in this part of the world (we issue debit note or issue certificate of
premium if required by principals that client agreed to pay & the risk is
hereby covered) & we honor all the claims once policy is issued irrespective
of the fact that the premium is paid or not.
The premium is normally based on value of the car and is calculated
keeping in view of past claim experience on the particular type of vehicle,
usage, geographical area, profession & similar other underwriting terms.
Normally for a saloon car if 4 cylinder the normal accepted worldwide rate
is @3-4%pct on comprehensive terms & excess of Dh.250/- & for T.P. it is
Dh.350/- to 450/-. The more the horse power of of the vechile the more
excess is incorporated.
85

86. MOTOR INSURANCE UNDERWRITING
KEY FACTORS
Vehicle Type and classification
Model, and Make
Condition New/ Used
Cover /Product TP/Comprehensive
Value /Sum Insured
Usage & Geographical area
Excess
Driver’s Gender, Marital Status & age.
Profession of Insured.
Limit of liability for T.P.L
Additional Covers PAB Drivers/Passengers, AAA, etc
Claims History
Fleet Size
86

87. MOTOR INSURANCE PREMIUM TYPICAL RATE
SHEET
COMP. COVER Agency
Repair
Non-
agency
repair
Remarks
Saloon 4 door
Saloon +car (4 cylinders)
Maxima, Altima
@3% @2.5% Excess=Dh.500/- up to
Dh.50,000/-
Excess=Dh.350/- up to Dh.51,000-
99,000/-
Excess=Dh.1000/- up to
Dh.100,000/- above
Saloon 4 door & USA/Canada
& Europe
Opel, Audi, Volkswagen, High
vehicles, Cadillac, (Sports
Cars)-Coupes
@3.5%
@3.75
%
@3%
@2.50
%
Excess=dh.2500/- up to
Dh.500,000/- above
Excess=Dh.5000/- up to 2 million
Excess= Dh.7500/- up to 2-
5million
4 Wheel drive
(Japanese)Nissan Patrol
4 Wheel European / USA
Cadillac, Lexus, GMC
@2.75
%
@3%
@2.5%
@2.75
%
Excess= Dh.500/- up to 75,000/-
Excess=Dh.750/- up to 76,000/-
99,000/-
Excess= Dh.1000/- up to 100,000/-
& above.
87

88. PREMIUM CALCULATION EXAMPLES
The value of Brand New Toyota Camry is Dh. 92,500/- & if the
rate of premium is @4% the premium will be as under:-
-Sum Insured : Dh. 92,500/-
-Rate : @4%
- Premium : Dh. 3,700/- + add 10% for underage <25yrs. (if
Insured age is <25yrs) + Personal Accident for driver Dh. 150/- +
4 passengers @ Dh. 40/-(160/-) + policy fees Dh. 25/-
A.
Total Premium :Normal: 3700+150+160+25 = Dh.4,035/-
Underage: 3700+370+150+160+25 =Dh.4405/-
Discount of 5% if more than 5 vehicles
10% for no claim bonus.
88

89. PREMIUM CALCULATION EXAMPLES
B.
Premium : 3700 + 150(Under age) =Dh.3850
Fleet Dis:3850– 5%(193)=Dh. 3657/-
NCB: 3657 – 10% (366)= Dh.3291/-
3291 + 310(PAB) + 25 = Dh. 3626/-
Exercises:-
Sum Insured: Dh. 100,000/-
Rate : 5% agency Repair 4% non-agency
Premium : Dh.__________
Premium : with fleet discount + N.C.B. + personal accident
driver & passengers.
89

90. MOTOR INSURANCE CLAIMS
90

91. MOTOR INSURANCE CLAIMS
90% of the Motor Claims are settled on cash basis in order to avoid
complications and litigations.
N.B. :- If the estimated cost of repairs exceeds more than 50% of cost
of vehicle Insured. Then it is considered as total loss.
91
INDEMNITY
REPAIRRE INSTATEMENT CASHREPLACEMENT

92. MOTOR INSURANCE CLAIM PROCEDURE
On receipt of the claim intimation or perusal visit of Insured regarding
claim i.e. theft or accidental damages of the vehicle insured or damages to
the third party properties, the motor claims department in Insurance Co.
will open the claim file and will do the following procedure :
1. Survey the damaged car or damaged property and take photos and write
survey report and in case of huge loss or complicated loss the professional
surveyor is to be deputed.
2. Take 3 quotations from various repairers/garages and after negotiations
issue L.P.O. for the lowest one to start repairs.
3. Take excess in case of our Insured’s fault only. For repairs of his/their
own car covered under policy and for T.P. Vehicle damages no excess is
deducted.
4. Take discharge receipt duly signed by Insured & release the repaired car
& in case of recovery prepared documents & send them to Insurance Co.
concerned for recovery.
92

93. RENEWALS PROCEDURE
The Motor policies whether T.P. or Comprehensive are issued for a
period of One year + One Month grace period in this part of the
world.
One Month Grace period is given for preparing necessary papers for
renewal at Traffic department for registration or for
repairs/denting/painting or re-instating in the good working
condition at garages.
We (Insurer) normally sends the reminding letter called “RENEWAL
NOTICE” for the expiry of the motor policy and the Insured has to
send it back duly signed to the Insurance Co. stating his/their
consent for renewals.
If any change i.e. CHANGE IN ADDRESS or CHANGE IN VEHICLES
SPECIFICATION is there or CHANGE IN VALUE etc or does not want
to renew or some other remarks can be stated for Insurer’s
consideration.
93

94. 4/17/2017 94
These are just basic concepts
Use them when you are working
on Motor Insurance function
And do keep reading other
material and developments
through Internet and Media

95. 4/17/2017 95
Thanks for your attention and valuable
time