Problems Associated with Conditions and Exclusions of Motor Insurance: Third Party Insurance in Focus
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Date
2020-05
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Abstract
Insurance is a means whereby the losses of the few are distributed among the many. It is a pool to which
a large number of persons contribute and out of which those who suffer misfortune are compensated.
Apart from insurance laws, the process of compensation is regulated by insurance policies, which hold a
lot of terms and conditions as well as exclusions. In the terms of insurance policies, there might be
confusions and misunderstandings regarding the application of conditions and exclusions among the
insurer and the insured as well as third party victims, which finally lead to complications in the insurance
compensation process. Mainly, the validity and effect of exclusions and conditions towards the insured
and third party victims seems to be confusing practically. In addition, the rule of interpretation of policy
conditions and exclusions is not clearly noted in the Ethiopian insurance laws, which hinders the uniform
application of insurance policies and laws in the judicial system.
The central objective of this study is to examine and identify the major legal and practical
problems of conditions and exclusions of compulsory third party motor insurance (henceforth “CTPM”)
policy. The paper will try to explore the confusion created between exclusions and conditions of third
party motor insurance policies. It tries to examine the validity and effect of conditions and exclusions of
motor compulsory third party liability insurance towards the insured and third party victims. It also
analyzes the rule of interpretation of insurance contracts and the necessity of extension clauses in motor
insurance policies.
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In doing so, the researcher tried to use various data sources. Among these, interviews, court cases, insurance policies and other secondary sources are the basic ones. Finally, the thesis will try to recommend legally acceptable solutions so as ~ i ~ to resolve the problems stated hereof