Car industry feels aftermath of historic UAE floods one year on

More than 100,000 vehicles are believed to have been damaged by floodwater during record rainfall in the UAE on April 16 last year, with garages still dealing with the fallout 12 months on. Mechanics said that, due to water damage , more cars have been written off to insurance companies than have been repaired in the past year. Water ingress, electrical malfunctions and brake issues were the most common failures associated with flood damage. And while most motorists have seen a 30 per cent increase in their annual premiums as a result of unprecedented claims, owners of electric cars have been the hardest hit. A year on from the floods that caused widespread damage and disruption to the UAE during the heaviest rain since records began in 1949, insurers said electric vehicle premiums have soared 100 per cent. “While there is no official number which was declared, the industry estimates that approximately 100,000 vehicles were affected by the floods,” said Toshita Chauhan, business head of motor insurance at Policybazaar.ae . “Garages across the UAE were inundated with vehicles suffering from these problems. Insurance companies faced an overwhelming number of claims, receiving six to nine months' worth of claims in just one month. Despite the volume, the majority of claims were evaluated and settled within three months, as a few insurers overnight set up dedicated teams to manage the huge number of claims.” Ms Chauhan said the majority of damaged vehicles were in Dubai, Sharjah and Ajman. While most claims resulting from the floods were settled, some were rejected due to motorists driving through floodwater, worsening the damage to their vehicles. Vehicles under third-party liability coverage were also unlikely to have claims settled, and drivers were left facing hefty repair costs or having to buy a new car. According to Policybazaar, an online insurance aggregator, motor insurance premiums rose by up to 30 per cent as insurers adjusted to the heightened risk and financial impact of claims. Property insurance rates also experienced increases, of up to 15 per cent in the final quarter of 2024. “Many vehicle owners sought to enhance their coverage to protect against future weather-related incidents,” said Ms Chauhan. "This trend reflects a growing awareness among consumers about the importance of comprehensive coverage in mitigating heavy rains and floods risks. “Insuring electric vehicles can be more expensive than traditional vehicles due to the high cost of battery replacement and specialised repair requirements. Reflecting the unique aspects of electric vehicle ownership, car owners should also understand EV insurance costs have significantly gone up, with an almost 100 per cent increase in premiums.” In the aftermath of the rain that saw 254mm fall in a few hours, the UAE announced a Dh2 billion ($540 million) repair fund. Since then, online car showroom DubiCars reported a shift in consumer preferences towards more robust and versatile vehicles. The website reported a significant increase in demand for sports utility vehicles and pickup trucks, known for their higher ground clearance and off-road capabilities. Demand for pickup trucks rose by 11 per cent, while online searches for SUVs increased by 12.86 per cent. In contrast, sedans dropped in popularity, with 5 per cent fewer searches in the four months after the rain than the previous year. DubiCars also reported a significantly greater need for replacement vehicles, with 30 per cent more demand for newer cars in July 2024, compared with April that year. A further legacy of the floods is the impact on the used car market, as many damaged vehicles have been repaired and sold on. Garages said consumers should be wary when buying a second-hand vehicle, due to the number of flood-damaged cars in circulation. “If you suspect a car is flood-damaged, you should do a full inspection before buying,” said Ryan Hughes, co-owner of RMA Motors in Dubai. “You should be looking at the chassis for any signs of damage, and for any manipulation of bolts that are around the main structural areas and body panels. “If they've been manipulated or moved, that could be an indicator. If there is a concern about flood damage, lift up the carpets and look for any signs of water, such as water marks, or sediment stains, things like that, looking for corrosion in strange places. "You can also check the car’s computer fault codes to make sure there's no unusual short circuit or battery voltage faults recorded that shouldn't be there. This could be related to water ingress.” The UAE used-car market was valued at $20.15 billion in 2022 by industry analysts Credence and is expected to climb to $48.15 billion by the end of the decade. Passenger cars are the largest sector, with 196,470 sales expected by 2029, and SUVs dominating the market with a projected sales volume of $3.6 billion in 2025. Gary Wheeler, general manager of Saluki Motorsport in Al Quoz, said while the higher ride of SUVs can protect some vehicle components from floodwater, they are not immune to water damage. “Most of the cars we deal with are 4X4 off-road vehicles, so they're usually not affected like a normal car would be,” he said. “We've written off more cars than we’ve been able to repair. It depends how deep they've been in the water. If they've been up to the windows, everything's damaged internally, so it would be horrendously expensive to fix.” Mr Wheeler said damaged suspension components and excessive rust can indicate a car has suffered water damage. Dirty headlights are another sign a car was driven through floodwater. “Most people who have refurbished these cars and sold them on have done work on the car to make it look like it's never been in water – it is extremely difficult to tell,” he said. “We haven't had cars yet with excessive chassis damage but that doesn't mean we're not going to see it in the future. Once the water's gone inside the chassis, it will continue to corrode so you will have problems in a year or two.”

Car industry feels aftermath of historic UAE floods one year on

Checks necessary to spot flood-damaged vehicles resold on booming second-hand market