Residents still doubt need for insurance

High-profile blazes in Dubai have not resulted in boom time for providers and brokers, with only 5% of homes covered

Only 5 to 6 per cent of residents have home insurance

ABU DHABI // Insurance brokers estimate that only 5 to 6 per cent of residents are covered in case of a fire in their home, despite some policies costing less than Dh1 a day.

Although annual insurance cover can range between Dh300 and Dh1,300 for a one- bedroom apartment , the majority of owners and tenants are still opting not to protect their homes with cover for fire, water damage or burglary.

After recent high-profile fires, such as last February’s blaze at The Torch tower in Dubai Marina and the New Year’s Eve fire at The Address Downtown Dubai hotel, enquiries about home and contents insurance have increased only slightly.

“Of course, after each disaster or major accident we see people reacting, driven by awareness, to buy home insurance. But, unfortunately, such a trend gradually drops with time,” said Issam Mouslimani, head of regional retail product at Axa, the French insurer.

A general lack of awareness, relatively few incidents and the fact that contents insurance was not mandatory were all reasons why so few people took out cover, said Mr Mouslimani. “We have to remember that frequency of damages might be low but the costs are very high when an incident occurs and could change your life. You would be shocked to hear that only about 5 to 6 per cent of residents have home insurance.” A common misconception among many renters is that landlords are responsible for home insurance, when their policies do not cover tenants.

Abu Dhabi resident Sara Smiley said she only looked into home and contents insurance after she drove by the fire-damaged Marina Torch residential building in Dubai Marina last year. “I remember asking a colleague if it was covered through work or the building and I was surprised when he said no,” said the 34-year-old US citizen. As someone who has firsthand experience of such a tragedy after her childhood home in Florida was destroyed and rebuilt after a fire in 2010, Ms Smiley said she would have bought a policy as soon as she arrived in the UAE if anyone had mentioned it.

“I thought I was covered by work or in my lease. If anyone had tried to sell me a policy I would have taken it right away,” she said. Ramsey Chami, head of personal property at AIG Mena, said that tragedies such as fires or burglaries could “happen to any of us, and they can often also leave people homeless”.

He said insurance was important in these instances because it gave victims alternative accommodation until their home was habitable again or they found a suitable alternative.

Ms Smiley said experiencing a fire was devastating, with possessions lost for ever.

“All of the Christmas ornaments I made as a child, which my mum constantly used to embarrass me with, are now gone.”

However, the fact her mother had insurance at the time allowed her to rebuild and refurbish the family home, which eased their recovery.