Damaged to The Torch is pictured after a fire engulfed the residential skyscraper in the Dubai Marina. Warren Little / Getty Images
Damaged to The Torch is pictured after a fire engulfed the residential skyscraper in the Dubai Marina. Warren Little / Getty Images

The lowdown on home contents insurance following the Torch tower blaze in Dubai



It’s over a week since the fire at The Torch in Dubai Marina saw 1,000 residents flee in the middle of the night. But while work is being carried out to repair the damaged 87-storey building, one of the world’s tallest residential towers, the attention must surely turn to home contents insurance. The UAE penetration rate for home contents insurance is low at around 6 per cent meaning only a handful of the tower’s residents would have had their belongings insured against any damage.

While the majority of those living in The Torch are unaffected, residents of Tamweel Tower, which was gutted by a fire in November 2012. know only too well the ramifications of not protecting their belongings against fire, flooding or burglary. Repairs are yet to get underway at the 34-storey building in Jumeirah Lakes Towers, where many lost their entire personal possessions as well as the home they lived in. Owners there are forced to rent while negotiations continue, an owner has told The National.

With that in mind, here, David Harris, director – Affinity & Direct, UAE and Bahrain at RSA Insurance, explains the ins and outs of home contents insurance, revealing that cover can start from as little as Dh21 per month:

Have you noticed an increase in home insurance enquiries since the Torch fire?

We always notice a surge in enquiries following unfortunate incidents. For example, there was a 400 per cent increase in enquiries and 90 per cent increase in policy purchases following the Torch fire. However, it is often only in the immediate period following these events that residents are willing to purchase policies, but this attitude seems to wane over time. Unfortunately, we see that the GCC region still exhibits low penetration levels of home and content insurance. While 76 per cent of residents in the UK have some sort of a home insurance policy, this is shockingly low at around 6 per cent for UAE residents.

Why don’t people bother with home insurance in the UAE?

The reason why home and content insurance penetration rates across the country remain far lower than more mature markets appears to primarily be based on different cultural attitudes. While Western expats are aware of these products, the highly-transitory nature of this demographic means that they see their stay in the UAE as temporary, due to which they do not think it is necessary to buy home insurance.

With regards to the South Asian and Arab expats, we see that there is a lack of awareness for these products and for their importance, which ultimately leaves many of their precious contents exposed in times of emergencies. Additionally, as a large proportion of the UAE residents are not homeowners, they often opt to disregard the need for home insurance.

What should a good home contents insurance policy cover? And how much is the average home insurance policy?

RSA, along with a majority of other companies, offer two types of products that provide ample cover for building, contents, and personal possessions. The basic home insurance policy provides cover against fire, natural calamities, and damages from third parties up to a certain limit. For those not familiar with home and contents insurance, we have developed the packaged product. With this policy, people do not have to disclose the list of their contents and personal possessions, but are provided a total coverage amount up to a certain extent, with the cheapest package being Dh21 per month - less than Dh1 per day. At the same time, those looking for more extensive coverage can apply for Declared Sum insurance, which allows customers to define their list of items to be protected and estimate their value.

How much cover does the average person realistically need?

We have seen that people realistically need to be covered across three different areas. The first is coverage for the building: that is protection for the structure of the residence if someone owns the property. The second is contents insurance for anything immovable inside the house, for example furniture; and the third is for personal possessions, which includes items that we carry around outside the homes such as mobile phones, watches or jewellery. This provides them cover against fire, natural calamities, and other such unexpected events. It also covers people against accidental damage such as burst pipes, which is a fairly common occurrence. One is also protected against liability to their landlords, neighbours or other third parties up to a certain limit.

What happens if you have no home contents insurance?

Although most UAE residents are not homeowners, there should be no room for regrets when it comes to insuring their homes and their most precious belongings. Expats, who constitute the majority of the UAE population, travel extensively and often leave behind an unattended home and valuables that are exposed to theft or other damages. Home insurance is meant to protect homeowners from potential accidental damage to the house as well as against the loss of any items inside the home or carried outside the home. While we see that most people tend to reassure themselves that it is unlikely that they would be victims of unfortunate events, no one is completely safe and unforeseen events can always arise. People can overcome these risks by applying for home content insurance and securing their peace of mind.

What about if you live in a tower block - wouldn’t the building have a policy that would cover you?

One of the most common misconceptions we see is that people do not think they have to insure their homes if they are rented. The building’s insurance policy only covers the structure; not the actual content inside the home. Opting for home and content insurance is also essential as it covers them for any liability towards their landlords or neighbours brought about by any accidents.

What do people typically miss out from their policy?

Customers need to primarily be aware of the extent of the coverage they have and make sure their possessions’ inventory is updated. It is also very important not to make any incorrect assumptions about what damage will automatically be covered by the policy. Certain areas that customers should look out for when examining their package includes business equipment around the house, tenants’ liability, single item limit for precious belongings, cash kept at home, freezer contents, and home emergency coverage among others. Insured individuals also have to understand that their policy will only cover the repair or replacement of damaged or lost items according to the current market value. Additionally, since UAE residents travel extensively, they may also need to check what their insurer’s limits are in terms of how long a property can be left unoccupied and still remain protected.

And how has RSA helped policyholders living in the tower?

Immediately following the fire, we tasked our customer service team to call 17 of our customers who happened to be residents at the Torch to inform them that they were entitled to alternative accommodation should they need it. In this manner, we always look to keep our customers’ well-being at the heart of our business.

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Name: HyperSpace
 
Started: 2020
 
Founders: Alexander Heller, Rama Allen and Desi Gonzalez
 
Based: Dubai, UAE
 
Sector: Entertainment 
 
Number of staff: 210 
 
Investment raised: $75 million from investors including Galaxy Interactive, Riyadh Season, Sega Ventures and Apis Venture Partners
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Uefa Champions League semi-final, first leg

Barcelona v Liverpool, Wednesday, 11pm (UAE).

Second leg

Liverpool v Barcelona, Tuesday, May 7, 11pm

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COMPANY%20PROFILE
%3Cp%3E%3Cstrong%3EDate%20started%3A%3C%2Fstrong%3E%202020%3Cbr%3E%3Cstrong%3EFounders%3A%3C%2Fstrong%3E%20Khaldoon%20Bushnaq%20and%20Tariq%20Seksek%3Cbr%3E%3Cstrong%3EBased%3A%3C%2Fstrong%3E%20Abu%20Dhabi%20Global%20Market%3Cbr%3E%3Cstrong%3ESector%3A%3C%2Fstrong%3E%20HealthTech%3Cbr%3E%3Cstrong%3ENumber%20of%20staff%3A%3C%2Fstrong%3E%20100%3Cbr%3E%3Cstrong%3EFunding%20to%20date%3A%3C%2Fstrong%3E%20%2415%20million%3C%2Fp%3E%0A
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Other workplace saving schemes
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  • Dubai’s savings retirement scheme for foreign employees working in the emirate’s government and public sector came into effect in 2022.
  • National Bonds unveiled a Golden Pension Scheme in 2022 to help private-sector foreign employees with their financial planning.
  • In April 2021, Hayah Insurance unveiled a workplace savings plan to help UAE employees save for their retirement.
  • Lunate, an Abu Dhabi-based investment manager, has launched a fund that will allow UAE private companies to offer employees investment returns on end-of-service benefits.
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Director: Magizh Thirumeni

Stars: Ajith Kumar, Arjun Sarja, Trisha Krishnan, Regina Cassandra

Rating: 4/5

 

FIXTURES

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Brackets denote aggregate score

Tuesday:
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Wednesday:
Besiktas (0) v Bayern Munich (5), 9pm
Barcelona (1) v Chelsea (1), 11.45pm

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Name: Almnssa
Started: August 2020
Founder: Areej Selmi
Based: Gaza
Sectors: Internet, e-commerce
Investments: Grants/private funding
The specs

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Torque: 250Nm
Price: From Dh139,000
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Starring: Dennis Quaid, Michael Ealy, Meagan Good

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Credit Score explained

What is a credit score?

In the UAE your credit score is a number generated by the Al Etihad Credit Bureau (AECB), which represents your credit worthiness – in other words, your risk of defaulting on any debt repayments. In this country, the number is between 300 and 900. A low score indicates a higher risk of default, while a high score indicates you are a lower risk.

Why is it important?

Financial institutions will use it to decide whether or not you are a credit risk. Those with better scores may also receive preferential interest rates or terms on products such as loans, credit cards and mortgages.

How is it calculated?

The AECB collects information on your payment behaviour from banks as well as utilitiy and telecoms providers.

How can I improve my score?

By paying your bills on time and not missing any repayments, particularly your loan, credit card and mortgage payments. It is also wise to limit the number of credit card and loan applications you make and to reduce your outstanding balances.

How do I know if my score is low or high?

By checking it. Visit one of AECB’s Customer Happiness Centres with an original and valid Emirates ID, passport copy and valid email address. Liv. customers can also access the score directly from the banking app.

How much does it cost?

A credit report costs Dh100 while a report with the score included costs Dh150. Those only wanting the credit score pay Dh60. VAT is payable on top.

Other key dates
  • Finals draw: December 2
  • Finals (including semi-finals and third-placed game): June 5–9, 2019
  • Euro 2020 play-off draw: November 22, 2019
  • Euro 2020 play-offs: March 26–31, 2020