Real estate owners complain about insurance companies’ delay in repairing “fire damage”

Residential unit owners whose units were exposed to fires complained that insurance companies delayed repairing the resulting damage for a period of up to five months, exposing them to financial and family problems as a result of instability.

They confirmed to Emirates Al-Youm that their units, financed by banks, have mandatory insurance accompanying the real estate loan that covers a number of risks, including the unit being exposed to fire.

They explained that the insurance accompanying real estate financing covers the risks of the units they own, in addition to the presence of other insurance on the entire building belonging to the developing companies or to the management of buildings that are exposed to fires. However, the damages are not repaired, whether by real estate financing insurance companies, or the companies contracting with the developers themselves.

They stressed that there is great procrastination that requires the intervention of regulatory authorities to determine a specific period and specific procedures to ensure the speedy repair of the damages.

For his part, insurance expert Issam Maslamani said, “Any person who buys a residential unit, whether for the purpose of housing or investment by renting it, must have insurance that accompanies the real estate financing, in addition to the tower management itself purchasing insurance for the building with all its units,” explaining that “insurance companies usually do not have the ability to cover the risks that the insured towers may be exposed to, so they resort to reinsurance companies.”

He stressed that this means the presence of insurance on the units financed by banks, each unit separately, in addition to a second insurance on the entire building with its units by the developer or the tower management. However, when danger occurs, some companies delay in repairing the losses resulting from the fire, and the result is that residents, whether owners or tenants, face difficult conditions as a result of failure to expedite repair procedures.

Maslamani stressed that “owners whose homes burn down face two types of losses. The first is if the owner rents his unit to another person, and the latter demands alternative housing that is supposed to be covered by the insurance policy. This does not happen except after the completion of investigations and procedures, and a challenge related to his search for housing for himself if he is residing in the unit.”

He noted that the mere occurrence of fire accidents requires the issuance of a report from the competent authorities, and as long as the accident is not premeditated, the unit owner has the right to return to the insurance company to request repair, and here the problem occurs as a result of the delay in the investigations conducted by it to approve the repair, adding: “Unfortunately, some companies procrastinate in the period, reaching four or five months, and sometimes to a full year, which is a long period, so it is important to establish procedures and controls.” Specific, guaranteeing a specific time for repair, similar to car insurance.

For his part, insurance expert, Bassam Galimran, said: “The laws regulating the insurance sector in the UAE, most notably Federal Decree Law No. (48) of 2023 regarding the regulation of insurance activities, in addition to the instructions and regulations issued by the Central Bank as the supervisory authority over the sector, have established clear controls for processing and settling insurance claims, in a way that guarantees the rights of the insured and achieves justice.” And transparency in dealing. These legislations oblige insurance companies to undertake the settlement of claims within appropriate periods of time, and to inform the insured in writing of the reasons for any delay or rejection of the claim, in accordance with what was stipulated in the Central Bank’s instructions for protecting customers and settling claims.”

He added: “In practice, the insurance companies operating in the country are considered prudent and committed companies, and do not intentionally delay the payment of compensation, but rather work according to the procedures approved for registering the claim, appointing an inspection expert to assess the loss and prepare the technical report, and then determine the amount of compensation due in accordance with the terms of the insurance policy. However, some delays may occur in limited cases and for technical or organizational reasons such as delaying documents, or waiting for reports from the competent authorities, and these are limited exceptions that do not represent the approach of the UAE market in general.”

He continued: “It is always recommended for insureds to deal with insurance companies with a strong financial position and good reputation, to ensure the speed and quality of insurance services. In the event of facing an unjustified delay, an official complaint can be filed with the Central Bank via the (Sanadak) platform, which is dedicated to protecting the rights of the insured.

In turn, banking expert, Ahmed Arafat, said, “The Central Bank obligates banks to provide insurance on real estate financing that covers – among its terms – fires, but what happens is that some insurance companies wait and delay taking any measures to repair the losses, thinking that the reason may be related to the maintenance of the building, for example, or the lack of fire sensors, or any other reasons, which make the building management responsible as a result of this negligence, and thus You must refer to the insurance company that you contracted with, and not the company affiliated with the bank or the insurance accompanying real estate financing.”

Arafat added: “The idea of ​​trying to shift responsibility onto another party, or waiting until all reports are issued by the relevant authorities, whether the police or civil defense, and the delay in investigations conducted by insurance companies, the consequences of which are borne by the owner or tenant, so it is better to have specific procedures that guarantee the rights of all parties.”

He noted that real estate financing insurance is binding, just like car insurance, but the practices on the ground remain not in the interest of the owner of the financed unit, which requires setting a specific time that must not be exceeded to repair the damage resulting from fires.