(Insurance Company vs. Unit Owners and/or Owner’s Association)
Sometimes we read and hear about fire accidents in Towers and High Rise Buildings in the UAE and abroad and we find, in many cases, the lives of the residents are saved by the prompt actions by the Authorities (police, civil defense etc.) but the losses incurred by the owners of the Units due to the fire accident is yet another story that usually does not come into the limelight. This Article sheds light on one fire accident that left many of Unit Owners helpless and lost regarding their precious homes which was a source of income or investments for most of them.
AFTER THE FIRE…
The Units became unfit for habitation due to the damage caused by the Fire, and one of the Insurance Companies was responsible for insuring the property against fire damage under the clear terms of the Insurance Policy as per the agreement between the Owner’s Association of the Tower and the Insurance Company, which covered Loss of Rent and Alternate Accommodation.
Loss Adjusters were appointed to assess the losses and coordinate with the Insurance Company and the Owners Associations regarding the claims. Finally, some owners received some payments from the Insurance Company that covered few months’ rent only and the Insurance Company made the Unit Owners sign acknowledgements and undertakings limiting their liabilities regarding the payments.
“At this point the reinstatement works of the Damaged Units was continuing. Finally, after more than 3 years from the fire, the Units were certified habitable by the Dubai Municipality.”
THE LAW AND THE TIME BAR…
Under the UAE Law and its amendments and as established under the Court of Cassation rulings, an insurance provider is liable to pay the insured for damage sustained to a property which is the direct and sustained result of a fire. But the statute of limitations for Insurance Claims is (3) three years from the date of the occurrence of the accident, or of the knowledge of the interested party of its occurrence.
For the Unit Owners residing outside the UAE, the communication with the concerned parties was only through emails and may be due to the lack of knowledge regarding the laws of the UAE and trusting the Insurance Company to compensate their losses, they waited, until they realized that it was almost too late!
ALLEGIANCE INTERNATIONAL ENTERS THE SCENE…
Some of the Unit Owners decided to approach us for initiating legal actions against the Insurance Company and we provided them with our Legal Opinion “1 month before the time bar”. From then, our office was totally invested in preparation of the cases day and night. From collection of documents of all the Owners of the Units residing in different parts of the World, to making the calculations of their claims, and preparation of the notices. We sifted through the documents correcting and replacing missing information and documents through constant follow up and emails and all this had to be done at a very short notice since the time was running very fast and the time bar was almost over. “We were glad that the Unit Owners trusted us and it was their trust that motivates us till this day to give our 100 %, take that extra effort and do what all we can do to protect their interest sometimes even when they do not realize or ask for it.”
Legal Notices were prepared and sent to the Insurance Company on behalf of the Unit Owners but the Reply Notice from the Insurance Company clearly confirmed their lack of intention of any kind of settlement.
LITIGATION BEGINS – FIRST INSTANCE COURT…
We filed cases before the First Instance Court for the Unit Owners just before expiry of the Limitation Period. We calculated compensation for the whole Indemnity Period as mentioned in the Insurance Policy after deducting the compensation paid by the Insurance Company in each case. Finally, the Court issued Judgment ordering the Insurance Company to pay compensation to the Unit Owners, but the amount of compensation and the calculation differed in some cases. “We won every case that we filed but we were not satisfied about the amount of compensation.”
APPEALS BEFORE COURT OF APPEAL AND COURT OF CASSATION…
We strongly advised our Clients to file Appeals before the Appeal Court and thereafter before the Court of Cassation and not to settle for the Judgment Amount lesser than what we expected (the Indemnity Period as mentioned in the Insurance Policy). Through our persistent efforts, our strong contentions backed by law, today most of our Clients are able to achieve full compensation as the Court of Cassation has accepted all of our Appeals and rejected all of the Appeals filed against our clients by the Insurance Company. We have been able to increase the compensation by more than AED 175,000 in some cases and this was only possible because we believed in ourselves and our work and our clients believed in us.
We still have cases at different stages before the Dubai Court and we are working tirelessly to get favorable outcomes. We also have clients who could not file their claims before the expiry of Limitation Period and we are working on innovative strategies to ensure that they also are able to get the relief. We work on new strategies to approach each obstacle that arises and we are very hopeful that our strategies will work.
By keeping the interest of our clients as our top most priority, we achieved what we are looking for. One of our greatest achievements in this journey was that we could do justice to our Clients by helping them to get the compensation that they were entitled to. The fire may have destroyed their homes but, with us, it could not destroy their hopes.
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