Many buy motor insurance without reading a line of the policy, then discover after an accident that the insurer refuses to pay or pays only a fraction. The reason is usually not obstinacy on the insurer's part but a clause the insured never read. The difference between the two types of cover lies not only in price but in the whole philosophy of cover. This article explains the difference, the limits of cover, common exclusions, and how to address a refusal, under the general rules on insurance contracts in Kuwait Civil Code No. 67 of 1980.
The Essential Difference
- Third-party cover: covers damage the insured causes to others in person and property and does not generally cover the insured's own vehicle or injuries.
- Comprehensive cover: additionally covers damage to the insured's own vehicle even where they caused the accident, and may extend to theft, fire, and other losses depending on the policy.
- Compulsory and optional: third-party cover is compulsory by law because its purpose is to protect victims rather than the driver, while comprehensive cover is optional and contractual.
- The third party's direct right: under third-party cover an injured person may claim directly against the insurer, an essential protection for them.
- A common confusion: many believe third-party cover extends to their own vehicle, an error costing them the entire repair cost.
What the Policy Covers
- Third-party bodily injury: treatment costs and compensation for disability and death within the limits the policy and the law fix.
- Third-party property damage: repairing the other vehicle or damaged property.
- The insured's own vehicle: under comprehensive cover only, subject to the excess and limits the policy specifies.
- Additional cover: the policy may extend to theft, fire, natural disasters, towing, and a replacement vehicle, each at additional premium.
- Passengers: cover for passenger injuries varies by policy and should be verified rather than assumed.
- Driving abroad: generally not covered without a specific extension, a point overlooked by those travelling by road.
Common Exclusions
This is where most refusals arise:
- Driving without a valid licence: among the most consequential exclusions, covering an expired, suspended, or wrong-category licence.
- Driving under the influence: an almost universal exclusion in every policy.
- Non-conforming use: using a private vehicle to carry passengers for hire, in racing, or for unlicensed driving instruction.
- Unauthorised drivers: where the policy names specific drivers, driving by another may void cover.
- Intentional acts: damage deliberately caused by the insured is not covered by its nature, as insurance covers accidents rather than crimes.
- Leaving the scene: commonly listed as an exclusion in addition to being a separate offence.
- Late notification: policies require notification within a short period, and delay may forfeit cover.
The Insurer's Recovery from the Insured
A matter that surprises many:
- The idea: under compulsory third-party cover the insurer may pay the injured person for their protection and then recover from the insured where the accident fell within an exclusion.
- The basis: protecting the victim does not relieve the person responsible. The exclusion operates between insurer and insured rather than against the injured party.
- Situations: driving without a licence, under the influence, leaving the scene, or concealing material information at inception.
- Practical effect: a driver may find themselves liable for a substantial sum the insurer paid the victim, which makes compliance with policy conditions a financial rather than a formal matter.
Claims and Refusals
- Immediate notification: notify the insurer immediately after the accident within the period the policy prescribes.
- Documents: the traffic report, photographs of the damage, driving licence and vehicle registration, and medical reports where there are injuries.
- No repairs before inspection: repairing before the insurer's inspection destroys the evidence and gives grounds for refusal.
- Refusal in writing: where the insurer refuses, request the reason in writing with reference to the policy clause relied on.
- Regulatory complaint: a complaint may be made to the insurance sector regulator, a faster route than litigation.
- Court proceedings: remain available to claim compensation, and an injured party may sue the insurer directly under third-party cover.
- Expert evidence: where quantum is disputed an independent expert is appointed, and you are not bound by the insurer's assessor alone.
Practical Guidance
- Read your policy at least once, focusing on the exclusions rather than the price.
- Verify that everyone who drives the vehicle is covered.
- Disclose accurate information at inception, as concealing a material fact may avoid the whole policy.
- Renew before expiry, as a single day without insurance exposes you to full liability.
- Keep an electronic copy of the policy on your phone with emergency numbers.
- Do not sign a final discharge with the insurer before your medical condition has stabilised where there is an injury.
An insurance policy is a complete contract rather than a payment receipt, and reading it once spares you facing a refusal in the most difficult circumstances. Yamnak Law Firm advises on reviewing policies and assessing cover and represents insureds and injured parties in insurance disputes and compensation claims.
