Top Tips for OA Managers in the UAE When Procuring Insurance for JOPs

In the dynamic real estate landscape of the UAE, Owners Association (OA) Managers play a pivotal role in safeguarding the interests of property owners. One of the most critical responsibilities is ensuring that jointly owned properties are adequately insured. Here are some top tips to help OA Managers navigate the insurance procurement process effectively:

1. Prioritize Accurate Reinstatement Valuations

Underinsurance is a common and costly pitfall. If a property is insured for less than its actual reinstatement value, any claim payout may be proportionally reduced, leaving the OA and owners financially exposed.

1. Why it matters: Some insurers may apply the “average clause” if there is no reinstatement valuation conducted hence in the event of underinsurance, can significantly reduce claim settlements.
2. Best practice: Commission a professional reinstatement valuation by RICS-certified professional at least every 3 years, or sooner due to fluctuating costs of materials and labour in the UAE, as well as if there have been major renovations or market shifts. This ensures the sum insured remains adequate.

2. Disclose Risk Improvement Measures

Insurers reward transparency and proactive risk management. Sharing details of risk improvement initiatives can lead to better terms, lower premiums, or broader coverage.

Examples of risk improvements:

Fire and Safety Systems

Certification and Maintenance: Provide evidence of Dubai Civil Defense (DCD) or Abu Dhabi Civil defence compliance. Ensure all fire alarms, sprinklers, extinguishers, hose reels are serviced, tested and certified regularly, with logs readily available. Appointing professional Facility Management agencies for AMC for the critical building equipment maintenance.

Emergency Procedures: Establish and test a clear Emergency Response Plan (documented). Conduct regular fire drills to demonstrate preparedness.

Water Damage and Leakage Prevention

Plumbing Maintenance: Implement a Planned Preventive Maintenance (PPM) schedule for all common area plumbing, drainage systems, and water-fed equipment (e.g., chillers, water heaters).

Leak Detection: Document any history of major leaks and remedial actions taken. Consider installing advanced smart leak detection systems in high-risk areas using dual sensing technologies and AI.

 Security and Access Control

1. Surveillance: Ensure CCTV systems cover all common areas, are fully operational, and have sufficient data storage for investigations.
2. Access Control: Maintain functioning systems (e.g., electronic gates, key card access) to deter unauthorized entry and vandalism.

Lift and Machinery Breakdown

1. PPM Documentation: Furnish complete records of the PPM program for critical machinery such as lifts, HVAC systems, and pumps. Well-maintained equipment reduces the likelihood of costly mechanical breakdown claims.

Tip: Document and share these measures with your broker or insurer during renewal discussions.

Communication

Regularly update Owners, Tenants, Owner committees, Security, FM team “on weather alerts” Insurers and local authorities on the situation to ensure everyone is aware of the ongoing developments.

3. Engage a Specialist Insurer

Working with an Insurer who understands the strata insurance market in the UAE can make a significant difference.

Benefits:

1. Tailored advice on coverage enhancements
2. Assistance with claims management and policy interpretation

4. Review Policy Wording Carefully

Not all strata insurance policies are created equal. OA Managers should ensure that the policy covers all essential risks, including:

1. Building and common area property damage
2. Loss of rent or alternative accommodation
3. Voluntary Workers
4. Public liability
5. Fidelity guarantee (protection against fraud)
6. Board members/ Owners committee Legal liability
7. Machinery breakdown (e.g., lifts, generators)

Tip : To ensure you have the most comprehensive cover possible request to also include Terrorism or Political Violence cover and new emerging risks such as Cyber.

5. Maintain a Clean Claims History

A strong claims record can enhance your negotiating position with insurers

How to achieve this:

1. Promptly address maintenance issues
2. Educate residents on risk prevention
3. Implement a formal incident reporting and response process

6. Plan Renewals Early

Start the renewal process at least 120 days before expiry. This allows time to:

1. Conduct valuations
2. Gather updated risk information
3. Compare quotes and negotiate terms
4. Finalise budgets for the jointly owned property

Conclusion

By taking a proactive and informed approach to insurance procurement, OA Managers can ensure comprehensive protection for jointly owned properties while optimizing costs. Accurate reinstatement valuations and transparent communication of risk improvements are not just best practices—they are essential tools for securing the best outcomes in today’s insurance market.