Control of policy terms
Insurer v third party victim
7.1 With regards to the enforceability of policy conditions that aim to either restrict or limit the coverage provided by the insurance contract, first of all, the focus should be on the claimant who is making a claim against the insurer. The compulsory MTPL insurance scheme does not permit a number of terms to be contended against the third party victim where those terms aim either to exclude or limit the insurer’s liability. On the other hand, such restrictions may be effective in the contractual relationship between the assured and the insurer so that the latter, after compensating the third party victim’s loss, may recoup against the former. This would mean that towards the third party the insurance cover is provided although the insurer has a contractual defence, and that defence would be the basis of the claim against the assured. The insurer had compensated the third party because the compulsory MTPL insurance scheme requires the insurer to do so, so that the third party victim is not prejudiced because of such clauses in the insurance contract. On the other hand, since the insurer would have been entitled to argue those clauses towards the assured, now, the insurer can rely on them in a claim for reimbursement from the assured.
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