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Understanding Insurance Coverage: Navigating Claims for Rain and Flood Damage in the UAE

What is the legal and legitimate way to have those affected by the rains and floods claim from their respective insurers? Somebody informed me yesterday that this sector cannot claim because it has been provided in the insurance policy clauses that these kinds of problems are excluded and cannot be claimed since 2008.

The cardinal rule for potential claimants would appear simple yet crucial: Read Your Policy. Twice. If the policy doesn't explicitly cover damages from natural disasters like flooding, unfortunately, the damage may not be covered.
What is also vital to note is that insurance policies typically outline specific "Named Perils," events that are covered under the policy. It's imperative for individuals to review their policies to understand what risks are covered and what are not. Unlike some countries, the UAE doesn't impose a standard mandatory insurance requirement for residential properties. Therefore, residents need to ascertain whether their communities or buildings have procured insurance that covers damages from flash flooding.

Commercial properties, on the other hand, usually require public liability insurance, which covers damages to third parties. However, the extent of coverage again depends on the specific terms of the policy.

Regarding car insurance, flood damage and natural disasters are typically excluded from standard motor insurance policies. The talk of the town at the moment is that coverage differs if cars were stationary at the time of damage or not. That is simply not the case, it all comes down to the perils included in the insurance policy.

The world is experiencing climate change wrath and so expect the worst of the climate and weather to come in the future. Do you suggest that local to international lawmakers, policymakers and government leaders consider the plight of the victims of any natural calamity relative to insurance? Please express your stand and please explain.

No one can deny that the climate is changing and at a dangerous rate. Such change has made countries in the GCC vulnerable to infrastructural damage caused by unprecedented weather. There is no doubt that the GCC countries have made substantial efforts in developing their infrastructure, however not at the befitting speed. Us, in the legal profession believe that policymakers and government officials need to raise awareness about the impact of such changes on the lives of residents and their assets. Moreover, we believe that government policy mandating the inclusion of certain provisions within insurance policies is key to protecting residents from damage done by natural disasters over which they have no control. Obviously, we expect that such policies bear a balance between the interests of the insurers and the insured. From our end, we are advising our clients to equip themselves with the necessary insurance policies and have consistently advised them to scrutinise the latter.

Have you been consulted with relative to the recent rains and floods? If so, may we get the numbers and please cite three cases and your respective advice.

We have provided consultation on multiple cases. Regrettably, due to confidentiality agreements we've entered, we are unable to reveal specific client identities. However, we can share that two of our clients faced challenges in seeking compensation for damage to their residential properties caused by recent flash floods. Their insurance policies did not encompass natural disaster-related damages. Conversely, we anticipate a successful outcome for our third client, as their insurance policy explicitly covers flood damage resulting from natural disasters.

This article was written by Mahmoud Kreidie, highlighting the key importance of thoroughly reading insurance policies to understand what is covered, especially in regions vulnerable to natural disasters, and the recommendation for policymakers to consider mandating provisions in insurance policies to protect residents from damages caused by natural calamities.

BSA is a regional Law Firm in the Middle East with offices in the UAE, Oman and Saudi Arabia. As a full-service law firm our practice areas include litigation, arbitration and corporate services, including M&A, banking & finance, Intellectual Property, TMT, Fintech, employment and insurance.

Published on 15 May, 2024.

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