UAE insurers required to cover flood damage under comprehensive motor policies

Dubai: Motor insurance policies in the UAE classified as comprehensive will cover damage caused by heavy rain and flooding, provided the weather event is not officially declared a natural disaster, a senior insurance official has confirmed.

Mohammed Mazhar Hamadeh, Vice Chairman of the Higher Technical Committee and Head of the Motor Committee at the Emirates Insurance Federation, said the unified comprehensive motor insurance policy, which covers loss, damage and third-party liability, automatically includes protection against rain- and flood-related damage under its standard terms.

“The coverage applies as long as the state has not declared the rainfall a natural disaster,” Hamadeh saidm according to Emarat Al Youm. “In the event of such a declaration, compensation would fall under state responsibility rather than insurance companies.”

He noted that the rainfall experienced in the UAE this year, as well as during last year’s severe weather, was not classified as a natural disaster. As a result, insurers remain obligated to process claims and compensate policyholders for eligible losses.

Hamadeh said insurance companies were instructed last year by the Central Bank of the UAE to settle flood-related claims, and the same principle applies to the current weather conditions.

However, he stressed that coverage is conditional on responsible behaviour by vehicle owners. Insurance applies only when vehicles are parked or driven in recognised and permitted locations such as public roads and designated parking areas.

“Damage sustained while deliberately driving into wadis, flood channels or known high-risk areas is not considered a natural hazard,” Hamadeh said. “In such cases, insurers are not obliged to compensate, even if the vehicle is comprehensively insured.”

He added that intentionally exposing vehicles to danger negates the concept of an unforeseen risk, which is fundamental to insurance coverage.

Hamadeh confirmed that all insurance companies in the UAE are bound by the contracts they issue, and that regulatory authorities closely monitor compliance with insurance laws and frameworks. At the same time, he said, policyholders have a responsibility to act prudently and avoid placing their vehicles in hazardous locations.

The comments come after a number of vehicles sustained varying degrees of damage during recent rainfall, with some owners reportedly parking near wadi flows to photograph or observe the weather. In several cases, vehicles were declared total losses after being caught in fast-moving water.

Insurers are expected to continue processing eligible claims in line with the unified policy terms, provided losses occurred under normal and lawful circumstances.