Insurance not liable if car owner hides information: Dubai Court

Car dealerships have no responsibility for damages due to car accidents or misuse by the buyer, once the buyer has used the vehicle for a period of time, the Dubai Court of Cassation has ruled.

However, if there is a manufacturing defect or a defect prior to sale, the dealership can be held responsible.

The court also ruled that the person who buys a car should not withhold any information while signing the insurance contract.

Any information withheld will exempt the insurance company from an obligation to pay compensation.

Based on these legal principles, the court has rejected a suit filed by a person against a car dealership and an insurance company in the UAE, seeking reimbursement of Dh261,000 - the value of the vehicle purchased.

Here, the plaintiff (the buyer) claimed in his case that the car caught fire whilst in a workshop as a result of a mechanical failure in the transmission.
The Court of First Instance rejected the lawsuit, but the plaintiff appealed the verdict .

The Court of Appeal rejected the appeal, which was then moved to the Court of Cassation.

Based on the above, and previous legal precedents, the Court of Cassation rejected the appeal.

An expert report claimed that the car had several changes made to it – including having the original exhaust system replaced.

The expert asserted that such modifications could be the reason of the fire - which was caused by oil leaking from the transmission.

The car had been used for more than a year.

Regarding the responsibility of the insurance company, the court ruled: "The plaintiff installed a new exhaust system to increase the capacity of the car.

“He did not inform the insurance company about the modifications to assess whether they agree to insure it or not.

“Because of the failure to notify the insurance company, it is not obliged to cover the risk caused by the insured.”

[Image via Shutterstock]

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