ABU DHABI // Crashes involving several vehicles often lead to extremely high insurance payouts and legal battles between insurers and policyholders.
But having a policy does not give you the right to have an accident, said Fawaz Moukayed, chief executive of Guardian Insurance Brokers.
“It covers the unforeseen or improbable, it covers your negligence,” said Mr Moukayed. “Insurance companies should educate members about their rights as well as their obligations, which include abiding by the traffic rules.”
Mr Moukayed's advice comes after a 57-car pile-up on the motorway between Abu Dhabi and Al Ain on January 16, in which 14 people were injured.
One motorist was seriously hurt and the rest suffered minor injuries, police said.
About 80 cars were involved in a series of early-morning pile-ups on Friday as dense fog blanketed both carriageways of the Abu Dhabi to Dubai road. The number and extent of injuries have not been revealed.
Pile-ups can be complex, with investigators taking details of each car, position, driver and the weather conditions to check whose negligence set off the chain reaction.
Although eData Management Solution in Dubai does not have data on actual costs, Pascal Persoon, its chief executive, said these would involve damage to vehicles, medical costs, police, ambulance, Civil Defence and towing, insurance and opportunity loss since drivers were not able to work, arrived late at the office or missed their business appointments.
“It will be a huge amount,” said Mr Moukayed, who has been in the insurance industry for 33 years. “Any car will cost not less than Dh15,000 and Dh20,000, and in a worst-case scenario it could be a total loss.”
A vehicle is considered a total loss when the cost of the repairs is greater than the value of the car, or if the necessary repairs cannot be carried out safely or economically.
Last week’s incident “will be a huge claim that will cost millions”, said the head of an insurance firm in Abu Dhabi, who did not want to be named. “It will be catastrophic for the insurance industry.”
Mr Moukayed said: “It is difficult to put an estimate to the total cost. The involved cars could be a Bentley, a Mercedes, while others are Hyundais or Kias.
“One could have a scratch that costs Dh500 to Dh1,000 to repair, or it could be a total loss of Dh1 million.”
Freight companies in the US must have large liability policies should they have an accident affecting other vehicles, said Glenn Havinoviski, an associate vice president of transport systems at Iteris, a US traffic-management company.
“If it is mainly an accident started by individuals in private vehicles, it becomes a more complex issue on the level of insurance the driver is carrying,” he said.
In the UAE, the third-party liability for bodily injuries is unlimited and is taken care of by insurance companies.
“Individuals have no liability because they are covered by the motor policy, provided they are driving within the limitations of the insurance contract,” Mr Moukayed said.
For example, “a policy does not cover accidents when the driver is under the influence of alcohol”.
The Government requires insurance companies to compensate any third party in terms of property damage and bodily injuries.
“But the insurance company has the right to come back with the legal action against the insured,” Mr Moukayed said.