Insurance companies will not stump up the cash to cover flood damage because it is going to cost them too much, according to a senior insurance industry executive.
"Companies don't want to do it because it is too expensive" Ricardo Arroyo Herrero, regional manager of property and casualty services at Axa Insurance Gulf told 7DAYS yesterday, adding that that they are able to do the bare minimum that is set out by
the government.
AXA received roughly 130 claims as a result of the heavy rain earlier in the week.
The company said that 65 to 70 per cent of those claims will be covered.
Media reports stated yesterday that just 40 per cent of insurance policies in the UAE cover damage specifically caused by flooding.
Many insurance companies have been able to dismiss flood claims over the last few weeks saying that the policy standard imposed by the Ministry of the Economy does not cover "natural disasters" which includes the widespread flooding caused by heavy rains in the UAE this week.
Arroyo said drivers should check what is covered under their policies very carefully "because what the Ministry said is the minimum" and that only two or three companies in the UAE cover damage caused by flooding.
The firm's approach to flood damage meant it had to payout to fix 35 cars in one hit this week when a car park flooded in Abu Dhabi.
A pay-out, said Arroyo, is however determined on the grounds of intent.
This means that if the driver deliverately drove into a flood that will not be covered by the insurance.
But claims brought on cars parked at the time that the flood damage happened will certainly be accepted. And drivers that find that they are not protected could find that they are lumped with a hefty bill.
Arroyo describes the damage that is caused by to cars by flooding as typically being "total".
© 7Days 2010
