Two experts confirmed that insurance companies do not cover fire damage in mortgaged villas if they are divided into multiple residential units without the insurance company's knowledge, whether affiliated with the bank or an independent one. According to insurance expert Bassam Galmeiran, if the document is issued as a single-family residence and then is divided and rented without notifying the insurance company, the latter may consider this a fundamental change in the degree of risk. This could lead to a claim denial or reduction in compensation, especially if there are safety violations like improper electrical extensions, unsafe load increases, or failure to meet civil defense requirements. Galmeiran added that regarding a mortgaged property, the mortgage does not prevent compensation, but the bank is typically listed as the primary beneficiary in the policy, so compensation is settled in the bank's favor or with its consent. In conclusion, the decision to pay or deny depends on three key points: the declared use in the document, whether the insurance company was notified of the division and rental, and whether there are safety violations linked to the fire's cause. On the other hand, mortgage financing expert Ahmed Arafat stated: «Dividing villas is generally illegal, as they are conventionally for single-family occupancy with a single utility meter. Some divide them to house multiple families without documented contracts, leading to non-payment of municipal fees averaging 5%. Additionally, some merchants use these spaces as food storage, increasing the risk level beyond what is covered in the insurance policy».
