Tim Elliott
Welcome once again to Lawgical, the UAE’s first and only regular legal podcast. I’m Tim Elliott, and I’m here with the managing partner of the Dubai-based legal firm HPL Yamalova & Plewka, Ludmila Yamalova, our expert. Nice to talk to you.
Ludmila Yamalova
Great talking to you too, Tim. Thanks for having me.
Tim Elliott
In this episode, we’re talking about the weather and the implications of last week’s storm, which brought the most rainfall in a single day in this region since records began 75 years ago. Some areas recorded over 250mm of rain in less than 24 hours, leading to widespread flooding. Many cars became waterlogged, abandoned, or completely destroyed. It was—and still is—an incredible sight. Thousands, likely tens of thousands, of vehicles of all types—minivans, SUVs, saloons, supercars—were damaged. Ludmila, what happens to all those cars damaged during the storm?
Ludmila Yamalova
It depends. It depends on a number of factors: the type of car insurance, the nature of the damage, the cause of the damage, and perhaps most importantly, how the recent event is classified in legal terms.
Tim Elliott
What do you mean by classification? How do you classify the recent event?
Ludmila Yamalova
By classification, I mean whether the storm and flooding are officially categorized as a natural disaster. This distinction is critical because, under UAE law, damages caused by natural disasters are generally excluded from default vehicle insurance coverage.
Tim Elliott
Wasn’t it simply a natural disaster? Why is the classification so important?
Ludmila Yamalova
With regards to vehicle insurance, the classification matters significantly. The UAE’s unified motor vehicle insurance policy, which has been in place since 2016, explicitly excludes damages resulting from natural disasters from default coverage. This means that unless you have additional coverage that specifically includes natural disasters, your policy may not cover flood damage.
Tim Elliott
Why is that the default?
Ludmila Yamalova
The UAE’s unified motor vehicle insurance policy sets the minimum and default standards for all insurance companies. This federal policy outlines what is covered, what is excluded, and the limitations of coverage. According to Article 9 of Chapter 4 of this policy, damages directly or indirectly caused by natural disasters—such as floods, hurricanes, and tornadoes—are excluded from coverage.
Tim Elliott
Is there a definition of “natural disaster” under this policy?
Ludmila Yamalova
Yes, the policy defines a natural disaster as any general phenomenon arising from nature—such as floods, hurricanes, and tornadoes—that leads to extensive and widespread damage. Crucially, the event must also be officially declared a natural disaster by the concerned authority.
Tim Elliott
So, what is the primary law governing insurance in the UAE?
Ludmila Yamalova
The primary law is the UAE Civil Transactions Law No. 5 of 1985, which has been amended over time. Articles 1026 and 1027 define insurance as a contract between the insured and the insurer to protect against risks or accidents. The law also includes a defense for insurers called force majeure, which refers to extraordinary, unforeseeable events—like natural disasters—that may absolve insurers of liability.
Tim Elliott
Can you quickly define force majeure again?
Ludmila Yamalova
Certainly. Force majeure is a legal concept referring to circumstances beyond the control of the parties involved that prevent the fulfillment of contractual obligations. These events, which may include natural disasters, can excuse parties from their obligations depending on the contract’s terms and applicable laws.
Tim Elliott
So, in UAE law, force majeure can be used by insurers to deny claims related to natural disasters?
Ludmila Yamalova
Yes. Article 287 of the UAE Civil Transactions Law allows insurers to use force majeure as a defense, absolving them of liability if the loss resulted from events outside their control, such as floods or other natural disasters.
Tim Elliott
If the authorities declare this storm a natural disaster, does that mean all the damaged cars won’t be covered by insurance?
Ludmila Yamalova
Potentially, yes. Coverage depends on the specific insurance policy and whether it includes additional provisions for natural disasters. The default policy excludes such coverage, but some insurers offer more comprehensive policies that do include natural disasters. Ultimately, it also depends on how the authorities classify the event.
Tim Elliott
Which authority is responsible for classifying this event, and has it been officially declared a natural disaster yet?
Ludmila Yamalova
The UAE National Emergency Crisis and Disaster Management Authority is the likely federal authority to make this determination. However, as of last week, no official declaration has been made.
Interestingly, Dubai Police’s app includes a “natural disaster” category in its dropdown menu for requesting a police report. This suggests an acknowledgment of the event’s scale, but it’s unclear whether this has any legal bearing. Until there’s a formal declaration, insurance companies may treat claims differently.
Tim Elliott
What does this mean for car owners right now?
Ludmila Yamalova
For now, car owners should review their insurance policies. Most default policies exclude flood damage, but some comprehensive policies might cover it. The first step is to file a claim with your insurer, using a police report as required.
Tim Elliott
What should car owners do if their claims are rejected?
Ludmila Yamalova
If a claim is rejected, car owners can escalate the issue to the UAE’s Insurance Authority, now called Sanadak. All licensed insurers fall under its jurisdiction, and Sanadak can mediate disputes or compel insurers to comply with their obligations.
Tim Elliott
How do you file a complaint with Sanadak?
Ludmila Yamalova
You must first attempt to resolve the issue with your insurer. If unresolved after 30 days, you can file a complaint with Sanadak. Note that you cannot have an active court case regarding the same issue while filing with Sanadak.
Tim Elliott
And if Sanadak doesn’t resolve the issue?
Ludmila Yamalova
If Sanadak doesn’t resolve the issue satisfactorily, you can file a civil court case. Sanadak is a mandatory first step, but it doesn’t have exclusive jurisdiction.
Tim Elliott
Let’s wrap up, Ludmila. How would you summarize today’s discussion?
Ludmila Yamalova
This is a wait-and-see situation. While some insurers claim they will cover all damages, others may strictly follow the exclusions in the unified policy. Car owners should review their policies, file claims promptly, and be prepared to escalate disputes if necessary.
Tim Elliott
That’s Lawgical. Today, we explored the implications of the recent storm and flooding on car insurance claims in the UAE. Thanks for listening and watching. If you’re with us on YouTube, thanks as always to our legal expert, managing partner of HPL Yamalova & Plewka, Ludmila Yamalova.
Ludmila Yamalova
Thank you, Tim.
Tim Elliott
Find us on social media—Instagram, Facebook, LinkedIn, TikTok—at LY Law. All our podcasts are free at lylawyers.com. If you have a legal question, contact us there, and it may be answered in a future episode of Lawgical.
