Insurers have been receiving and rejecting a number of claims from vehicle owners who lose their cars to fraudsters.
In many cases, vehicle owners had offered their cars for sale on online marketing sites. They were persuaded into giving up ownership of the vehicles by registering the vehicles in the names of 'buyers', in exchange for cheques that were subsequently found to be worthless because the related bank account had been closed, according to a report by Emirates Today.
Several of the victims of these crimes demanded insurance compensation for their lost cars. Some argued that what happened to them is a form of theft.
However, Mr Essam Maslamani, the head of the motor insurance technical committee of the Emirates Insurance Association, stresses that the role of the insurance company is to transfer the risk from the side of the insured to its side, but the insurer cannot bear the responsibility for the insured's failure to adhere to the simplest degree of caution before voluntarily relinquishing his car and handing it over to a stranger.
He says that the insurance company is obligated to pay compensation if the loss or damage to the vehicle results from events like an accident, fire, burglary and theft. He points out that, in turn, there is an obligation on the part of the insured to ensure reasonable and obvious precautions to preserve the vehicle, so that he does not fall victim to fraud.
He also states that the contract becomes invalid as soon as the ownership of the vehicle is transferred to someone other than the original insured.
Colonel Omar bin Hammad, director of the Economic Crimes Department in the General Department of Investigations of Dubai Police, says that the number of such cases is falling because of higher awareness and the arrests of some fraudsters.