The United Arab Emirates (UAE) was hit by heavy rains and high winds over the weekend, causing damage to vehicles and houses. A lot of residents are now worried that their insurance will pay for repairs to their damaged cars and homes.
Damages caused by rains to homes and vehicles may generally be covered by most insurance policies, however, such claims may be maintained by the insurance provider based on the wording of the selected insurance policy’s coverage and exclusions.
What is Insurance? As Defined Under Article 1026 of the Civil Transactions Law
As per Article 1026 of the Civil Transactions Law, insurance is a contract according to which the insured and the insurance company agree with each other to face insured risks or accidents. If the motor vehicle policy is comprehensive including rain damages and natural disasters, then such damages may be covered. Similarly, the insurance policies for homes and property that cover all risks including natural calamity may cover the damages resulting from the heavy rains.
Knowing the finer details of your insurance policy is essential for filing a successful claim in the event of a natural disaster or flood. Coverage is conditional on the policy's terms, and the policy may exclude certain situations entirely, so it's important that you read the fine print – which many policyholders may ignore at the time of availing the cover.
Force Majeure
The insurance provider may take recourse to the exclusion clause of force majeure events in the policy as a defence against liability. According to Article 287 of the UAE Civil Transaction Laws, a party is not liable for damages if it can be shown that the loss resulted from an event over which he had no control, such as a natural disaster, an unavoidable accident, force majeure, the act of a third party, or the act of the party suffering the loss.
However, if the policy covers damages resulting from rains and natural disasters, then the insurance provider may be under a legal obligation to indemnify the insured in case such events occur.
The Abu Dhabi Court of Cassation reviewed a request to terminate a contract on the grounds of force majeure in case number 512 of 2021. The Court ruled that the occurrence of force majeure must be the only cause of damage in order to be excused from responsibility. The Court reiterated that it is within the trial court's discretion to rule on such questions.
However, it will be challenging to file a claim even if the insured has comprehensive coverage if the harm was caused by the insured's own wrongdoing and lack of care.
If the damage was due to heavy rain, then property insurance could be claimed. However, it will be difficult to file a claim if the flood was caused by accident due to negligence. Moreover, if your vehicle is damaged because it was left parked in a low-lying area or because you were driving through a flooded area, then the coverage and exclusions under flood and natural calamity events under your policy will determine whether or not you can file a claim.
Policy wording, particularly coverage and exclusion provisions, will determine whether an insurance company would pay out on a claim for damage to a policyholder's property in the event of a natural disaster.
Vehicle and property damage from heavy rains is generally covered by insurance policies unless damages to cars caused by weather-related events like storms, hailstorms, and flooding have been specifically excluded from coverage. Policy language should be carefully examined to avoid such scenarios.
