Today's Edition
KUUMAR SHYAM (ABU DHABI)
At least 5% of all cars in the UAE are currently looking at car insurance claims, according to a very conservative estimate by a leading insurance broker. Meanwhile, car garages and mechanics are also scrambling to lend support to all those caught off-guard by the recent historic rainfall, despite the UAE rolling out remote working environment advisories well in advance.
“Nobody could have prepared for a catastrophe like this, but the spirit of the UAE is very strong,” said Avinash Babul, the Chief Executive Officer of InsuranceMarket. “Everyone is trying their best, and we will be back on track very soon. Let’s hope we all show our resilience in getting over this.
“At least 5% of all vehicles have been impacted, if not more. And that could be conservative. Based on our data, the last time it rained [in February], claims were 2-3 times more than normal, but we are expecting 10 times that.
“Car insurance claims have obviously surged. Initially, the calls have been about roadside assistance, and that has also been challenging because even the recovery trucks have not been able to access the stranded vehicles in many parts of the UAE. That situation is still recovering, and hopefully we can get cars off the road as soon as possible.
“On the other hand, there will be a lot of total-loss cases because many cars were completely submerged and will have to be written off. For other cases, the garage infrastructure will need to ramp up their efforts in handling the volume of requests, and the insurance companies are going to see an unprecedented volume of cases.
“We are trying to assist the companies and the policy holders with dedicated teams. Requests have already gone up 10X from the average day and we expect it to only rise as consumers first look after their safety, and then get to such issues. Insurance is supposed to be there in times of need, and this is one, so we all need to do our best,” Babul said.
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The country has experienced its heaviest downpour since records began in 1949, according to the National Center of Meteorology. It has caused chaos for residents, as water entered homes and underground car parks, leaving some buildings without power and resulting in widespread flooding even a day later.
The anxiety-producing situation has led some people to rushing matters, which can complicate the issue from an insurance perspective.
On Abu Dhabi’s Hamdan Street, the multi-storey Al Sayegh residential-cum-commercial tower remained one such building with a flooded basement parking lot. A few residents tried to drive their way out, only for their cars to stall and aggravate the issue.
An employee from Abu Dhabi Commercial Properties told Aletihad they were in touch with the authorities and that “they have assured help as soon as possible”.
These entities include Abu Dhabi Civil Defence Authority, the Department of Municipalities and Transport, the Abu Dhabi Department of Energy, and Tadweer Group. Tankers are reaching out to buildings to drain the water now that the weather alert has eased, and sewage drains were being flushed of excess water by Thursday evening.
Mohammed Hisham, garage owner at Wheel Lab in Mussafah, said: “We are getting calls throughout the night for towing requests and trying to reach out wherever we can. But people are instinctively turning on their engines, and that is not good. Already, quite a few cars have come with their electronic steering modules getting busted as a result.”
On Thursday, with the sun shining, responding entities in Abu Dhabi stepped up their field efforts to assist those affected. Chairman of the Department of Municipalities and Transport, His Excellency Mohamed Ali Al Shorafa, reviewed the latest developments and response efforts of the department to ensure public safety and enhance preparedness of response teams.
The work from home policy has been activated by many organisations, while schools have been directed to continue distance learning until the end of the week. Flooding and traffic snarls will take time to clear up, though.
Ironically, people who start their cars or try to handle situations on their own in an attempt to get their cars to the workshop can harm the insurance process. Insurance companies recommend getting a police report for a status check on the car’s condition as is before having it towed away. In Abu Dhabi and the northern emirates, residents need to call 800-SAAED for the police report.
#NCEMA emphasizes the importance of staying at home and adhering to safety guidelines during the weather condition and obtaining information from official sources. #YourSafetyYourResponsibility. pic.twitter.com/3NCefbn5tm
— NCEMA UAE (@NCEMAUAE) April 16, 2024
Babul and Hisham acknowledged that information and standard operating procedures for such unusual circumstances is scarce and less common knowledge.
And yet, all the help is subject to the type of insurance coverage that one has. There are two types: comprehensive and third-party insurance. Coverage against natural calamities is mostly found with comprehensive insurances, but even they are subject to rider clauses which are correlated with the policy premium amounts. “Not necessarily; third-party insurance policies with riders on natural perils can be custom-arranged,” Babul said. There are rarely in practice.
Clauses around natural perils in insurance contracts will be looked at as the next futuristic line for brokerages and companies, Babul thinks.
“Natural perils are not commonly seen as a clause. I hope that this is planned, but insurance companies will also have to be extremely cautious because the extent of risks have changed. Now that they have experienced it, it will cost them hundreds of millions.
“Either they will pass on the costs as extra premium to the consumers, or revisit the coverage conditions. People here intentionally drive through puddles of water, and that is not recommended, and can be avoided. Many insurance companies will have to take note of such. It is an evolving situation… but the insurance company industry is coming together to serve the people of the UAE.”
