Temporary Car Replacement in Car insurance

Any sector in the world faces challenges in implementing its business mechanism, as is the case in the UAE insurance sector. Some policyholders have complained that some car insurance companies refuse to provide a temporary replacement car for someone injured in a car accident.

On the other hand, insurance companies confirm that they sometimes face difficulties in providing the vehicle that the affected person desires. Some insurance experts have found that one of the reasons for not providing an alternative vehicle is the emergence of a dispute between the two insurance companies over determining who was injured in the accident and his entitlement to this benefit.

In all cases, the Insurance Authority in the Emirates confirms this entitlement to the injured party. Where the system of standardization of insurance policies dealt with the obligations of the insurance company in the insurance policy against third parties, on the necessity of providing an alternative car for the injured person according to conditions. 

4 conditions for entitlement to a temporary replacement car in the car insurance policy

Choose cash compensation instead of repairing the vehicle

You have the right to choose monetary compensation in the event of an accident and damage to your car, instead of having your car repaired in the car insurance company’s repair shops. Once you opt for cash compensation, you forfeit your right to a replacement car or a loss of utility allowance.

Choose to repair the damaged car in repair shops

In the event that you choose to have your car damaged in one of the insurance company’s auto repair shops, the period for granting you a replacement car is calculated in days. Starting from the date you handed over the damaged vehicle, the accident report and the vehicle ownership to the company.

Terms of vehicle replacement

It is the duty of auto insurers to provide those affected with a loss of benefit allowance or a replacement car daily for a maximum of 10 days. The value of the car fare is calculated compared to a car of the same type of vehicle, provided that the amount does not exceed 300 dirhams per day.

Then you have the right – 

• Rent a replacement vehicle similar to the type of your damaged vehicle
• Renting a vehicle for no more than 300 dirhams per day
• The maximum rental period is 10 days

If  the insurance company refuses to pay the amount at the market rate, it must provide you and your place of residence with a replacement car of the same type as your damaged car. The temporary replacement vehicle must also be in very good condition to operate on the roads of the UAE.

Entitlement to replacement car in comprehensive car insurance

We repeat to you that the laws affirm your right to obtain an alternative vehicle, in third-party or comprehensive insurance, if you were not the cause of the accident. If you are a holder of a loss and damage (comprehensive insurance) policy, you must claim directly from your insurance company for the right to obtain a replacement car. In turn, it has the right to ask the insurance company of the person causing the accident to provide you with an alternative car, or the amount you paid in the fare of an alternative car, according to the rules specified in the civil liability document. Such actions or compensation must be immediate.

Please note – If you rent a replacement car on your own during the repair period, do not forget to keep the invoices until you submit them later to the insurance company, as evidence and evidence that you rented a car, to claim compensation.

Obtaining a replacement car is an inherent right of the injured party

You should know that the right to obtain a replacement car is an inherent right of the aggrieved party, and the legal text is clear and explicit. The insurance company issuing the insurance policy for the person who caused the accident is obligated to bear the cost of the replacement car. It must be noted that most auto insurance companies in the UAE comply with all the benefits of insurance policies. Despite this, some beneficiary companies try to evade some of the benefits of the injured party, and in general, these are exceptional practices in the insurance sector.

Why do some car insurance companies refuse to provide a replacement vehicle?

In special cases, some car insurance companies in the UAE refused to provide an alternative car for those affected by traffic accidents during the period of car repair. Where some tend to take advantage of the insured’s lack of knowledge of his rights contained in the insurance policy. In other times, a dispute arises between the insurance company of the injured party and the insurance company of the party causing the car accident, over who is the real cause of the accident and who should pay the value of the damages.

Some of those affected also request cash for the replacement car, without submitting invoices proving that they rented a car during the repair period.

What are the main problems related to provision of replacement cars in accidents?

• Waiting for the approval of the insurance company for the party causing the accident as it is responsible for covering the damages of the accident, although the procedures for providing an alternative vehicle or replacement car allowance must be immediate.
• Difficulty in providing the alternative vehicle that the insured wants. Or for the car insurance company to provide a car that does not meet the needs of the affected person.
• Failure to pay a replacement car allowance to the injured party due to the failure of the injured party to keep the financial bills that he had paid.
• Problems related to electric cars, whose repair period takes two months, due to the lack of auto parts at the auto repair shop. If the repair period exceeds 10 days, the affected person is responsible for paying the replacement car fare after this period has passed.

What do you do if the company refuses to provide a replacement car?

When the insurance company refuses to provide you with a replacement car according to the conditions stipulated in the vehicle insurance policy, the insured has the right to contact the Insurance Authority and file a complaint through the complaints system on their electronic platform.