Understanding Policy Clauses in the Wake of Recent Gulf Region Flooding

Recent Flooding and Policy Clause Misunderstandings

In light of the recent torrential rains in the Gulf region, insurers and loss adjusters from affected countries have raised questions about a specific policy clause: the requirement for building damage for a flood claim to be considered. This confusion prompted us to clarify the intent behind such clauses and their application in flood-related claims.

Historical Context and Legal Precedent

This scenario is reminiscent of a significant case in Kuwait in 1997, which culminated in the Supreme Court's ruling (Appeal No. 650, 1999). The court deemed the clause unreasonable when used by insurers to deny claims, referencing Article 784(b) of Kuwait Civil Law. This precedent highlights that the clause was designed to prevent fraudulent claims from open doors and windows, not to exclude legitimate flood damage through secured doors.

The Role of Loss Adjusters

It's crucial for loss adjusters to understand the rationale behind policy clauses and advise insurers accordingly. Their independence and expertise are vital in ensuring fair claim assessments, unaffected by external influences, such as reinsurers. By comprehending and correctly applying these clauses, loss adjusters can better serve the interests of both insurers and policyholders.

Understanding the reasons behind policy clauses is essential for effective claims management, especially in the aftermath of natural disasters like the recent Gulf region floods.