Resolving Insurance Disputes Disputes Effectively
By the time the real reason for a declinature has been extracted from the letter, the answer is usually already fixed by documents created long before anyone thought about a dispute.
An insurer that declines a claim is saying one of three things: the loss falls outside the cover, it is worth less than claimed, or the insured failed to do something the policy required after the loss. Working out which one, and answering it, comes down to the proposal form, the schedule and endorsements, the Arabic policy text an onshore court works from, and the Central Bank complaint route.
Reviewed by Mohamed Noureldin, Founder, Managing Partner & Senior Legal Consultant
An insurer that declines a claim in the UAE is rarely saying the policy did not exist. It is saying that the loss falls outside the cover, or that it is worth less than the sum claimed, or that the insured failed to do something the policy required of it after the loss. Which of those three things is being said often has to be extracted from a declinature letter that does not say clearly, and by the time it is extracted the answer is generally fixed already, by documents created long before anyone thought about a dispute.
Related: Our insurance dispute uae practice acts for both corporate policyholders and insurers.
The paper that decides the outcome
The file that matters is narrower than clients expect. It is the proposal form and anything disclosed with it, the policy schedule, the general and special conditions, every endorsement issued during the period, and the claim notification. Brochures, broker emails and renewal invitations rarely change the position.
Two points of UAE practice are worth knowing in advance. First, where a policy is issued in both Arabic and English and the two differ, it is the Arabic text that an onshore court works from, and translations filed in proceedings have to be certified. Reconciling the two versions at inception is far cheaper than arguing about them later. Second, exclusions and conditions that cut down the cover are read strictly against the insurer that drafted them; genuine ambiguity in wording tends to be resolved in the policyholder's favour. That is a reason to press for the precise wording relied on in a declinature, rather than accepting a general statement that the claim is not covered.
What insurers actually argue
In practice the grounds cluster into a short list.
- Non-disclosure or misstatement at proposal. The insurer says it would not have written the risk, or would have written it differently, had it known. The battleground is what the proposal form actually asked and what the broker was told.
- Breach of a policy condition after the loss. Late notification, failure to preserve the damaged property or the site, failure to report to the police where the policy requires it, settling with a third party without the insurer's consent.
- Exclusion. Wear and tear, defective workmanship, consequential loss, deliberate acts, categories of property excluded by the schedule.
- Underinsurance. Where the sum insured is below the true value and the policy contains an average provision, the insurer reduces the payment proportionately. This surfaces most often in property and marine cargo claims where values were never updated.
- Causation and quantum. The insurer accepts an insured peril but disputes that it caused the loss claimed, or disputes the measure.
Each of these is answerable, but the answer depends on records the policyholder controls and often has not preserved.
Where the dispute goes
Insurance companies operating in the UAE are supervised by the Central Bank of the UAE, and a policyholder in dispute has a route that does not begin in court. The first step is a written complaint through the insurer's own complaints process, asking for the decision in writing with the policy provisions relied on. If that fails, disputes between insurers and policyholders can be taken to the specialist insurance dispute committees that operate under the Central Bank's supervision, whose decisions can then be taken on to the courts. For claims of moderate size this route is often faster and cheaper than litigation, and it produces a reasoned decision the parties can work from.
Related: We also handle commercial and contractual disputes and intellectual property disputes where a claim spans more than one area.
Litigation onshore
Proceedings in the UAE courts are conducted in Arabic, on documents. Oral evidence plays a much smaller part than practitioners from common-law systems expect. The decisive step is usually the appointment of a court expert, who reviews the policy and the loss file and reports to the court. In practice, cases are won or lost in the submissions made to that expert, and the material has to be complete and translated when it goes in.
Insurance claims are also subject to a limitation period, and that period should be identified at the outset rather than assumed. Where an insurer has been in extended correspondence over a claim, do not treat that correspondence as having stopped time running without advice on the point.
Arbitration, DIFC and ADGM
Many commercial policies contain arbitration clauses. UAE arbitration is governed by Federal Law No. 6 of 2018, as amended in 2023. Two developments matter for insurance work. The DIFC-LCIA was abolished by Dubai Decree No. 34 of 2021 and its caseload moved to DIAC, so clauses in older policies still naming the DIFC-LCIA need to be read in that light. DIFC nonetheless remains available as a seat, which is a separate question from which institution administers the arbitration. In Abu Dhabi, ADCCAC was restructured as arbitrateAD from 2024, and older clauses referring to ADCCAC raise the same reading exercise.
A note of caution on consumer-facing policies: an arbitration clause that appears only in printed general conditions, never separately agreed by the insured, is more open to challenge than one in a negotiated commercial contract, and insurers should not assume it will carry them out of the courts.
The DIFC and ADGM courts are common-law courts with their own procedure and they hear insurance matters connected to those jurisdictions, including where the parties have agreed to their jurisdiction. Where a policy covers a group with entities inside and outside those zones, decide deliberately where a claim would be litigated rather than leaving it to the wording of a schedule.
The first fortnight of a disputed claim
Notify in writing and keep proof of when. Preserve the damaged property and the scene until the insurer's adjuster has attended or has been given the chance. Ask for the declinature in writing, with the clauses relied on identified. Consider appointing your own loss adjuster in parallel with the insurer's. And do not sign a discharge or receipt in full and final settlement to release an interim payment without knowing what it gives up — that document ends the claim far more often than any argument about coverage does.
Related Services: Explore our Insurance Disputes Advisory and Insurance Disputes Strategy services for practical legal support in this area.
Disclaimer: The information provided in this article is for general informational purposes only and does not constitute legal advice. Readers should seek professional legal advice tailored to their specific circumstances before making any decisions or taking any action based on the content of this article.
Nour Attorneys Team
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