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The UAE Central Bank: banks & finance companies may defer
personal and car loans installments for six months to overcome
the repercussions of the weather condition
The Central Bank of the United Arab Emirates has issued guidance to banks and insurance companies regarding the postponement of loans and insurance coverage for individuals affected by the recent severe weather conditions. This update aims to clarify the measures taken by the Central Bank to assist those affected by heavy rains and floods.
Loan Postponement Instructions:
• The Central Bank issued instructions to all banks and insurance companies to allow the postponement of installments for personal loans and car loans.
• The deferment period extends for up to six months and does not entail additional fees, interest, or an increase in the principal amount of the loan.
Clarification of insurance coverage:
• The Central Bank confirms that damage to vehicles and homes resulting from heavy rains is covered by insurance, provided that the property has comprehensive insurance coverage.
• Insurance companies are obligated to compensate policyholders for damages resulting from adverse weather conditions.
Consumer Guidelines:
• The Central Bank stresses the importance of carefully reviewing insurance documents to understand coverage rights.
• In the event of complaints or disputes with insurance companies, affected individuals are encouraged to contact Sanadak, the Financial and Insurance Ombudsman.
These measures aim to reduce the financial burden resulting from severe weather conditions and provide clarity on loan deferrals and insurance coverage to facilitate recovery from adverse weather events.
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