Insurance industry players have estimated that losses suffered by insurance companies arising from traffic accidents during the recent rains range between AED50m ($13.6m) and AED60m to date.
The unprecedented rainfall that the country witnessed during the first week of this year led to an increase in the level of rainwater which flowed through streets and inundated parking areas. The volume of rainfall has made January the wettest in the UAE's history.
The number of vehicles that were damaged, whether they were travelling on roads or stationary in public parking spaces, exceeded 3,000, reported the newspaper Al Khaleej. According to the Unified Motor Vehicle Insurance Policy, unless a weather pattern is declared a "natural disaster" by a competent authority, insurers have to compensate policyholders for damages caused by floods under comprehensive motor policies.
Insurance expert Ahmed Khater said that the value of the claims that insurance companies will incur in the coming period will rise without any doubt, given the increase in the number of traffic accidents, breakdowns and damage caused to vehicles. The insured losses could eventually lead to an increase in insurance premiums, especially on motor comprehensive cover.