Homes gutted by fire could have been insured for as little as Dh1,000

Low crime rates combined with the fact insurance is not mandatory means many tenants choose not to take out policies, leaving them vulnerable in case of disaster.

SHARJAH // Families who lost everything in a fire that gutted a Sharjah residential tower could have insured their homes and property for as little as Dh1,000 a year.

A total of 125 families were left homeless after the blaze, with 51 of the worst affected being awarded Dh50,000 in compensation from the Ruler of Sharjah.

Bosses at insurance companies in the UAE say a lack of awareness of the benefits and cost of household policies means many more people across the emirates are also at risk of losing everything in fires, thefts or other accidents.

Policies protecting properties are rarely taken out by residents as landlords and municipalities do not require tenants to have home insurance. This, along with the low crime rate in the UAE, means residents do not feel the extra cost of insurance is necessary, despite many living in high density developments.

Partha Kanjilal, the manager of Sharjah Insurance Company, said: "Policies insuring residents against fire and other accidents in their households are quite unpopular here as compared to India, where I worked in insurance before.

"There should be some awareness campaigns by the authorities here, you can not rely on insurance companies to do this."

According to a salesperson from the Sharjah-based Al Buhairah National Insurance Company, people living in Al Baker tower could have insured their homes for only Dh1,000 a year.

"We would need a full list of their furniture, valuables and know the amount of rent paid annually before we would insure. But, for example, for furniture and contents of about Dh100,000 and rent of about Dh38,000, which was being paid at Al Baker, one would have to pay less than Dh1,000 every year," he said.

He added items such as jewellery would need to be declared in advance and be covered by a separate policy.

However, insurance would not cover the cost of staying in a hotel and other living expenses tenants had to pay after the blaze. Any expenses incurred while people wait for compensation "go into consequence losses and are excluded," said Mr Kanjilal.

Taqred Musa, a manager at Al Baker Real Estate, which is responsible for Al Baker tower, said the building itself was insured but she did not know which tenants had insured their own apartments.

"It is private for one to insure his flat and we don't have information of this from any tenant," she said.

Mr Kanjilal said that the process of insuring your home is simple. "A client would first have to fill out an insurance proposal and then have experts asses the value of his assets. Each household would have to pay a different premium and compensation would be based on the value of assets at the time, minus depreciation."

Bashar Aboud, an Al Baker tenant whose flat was destroyed, said he had submitted a list of his belongings that were destroyed to his landlord in the hope that the building's insurance would be able to cover the cost of replacing it all.

"No one ever thought about fire gutting our building. We lived comfortably and thought all our safety was being cared for," he said.

Authorities are still investigating the exact cause of the fire, said Col Abdul Aziz Al Norman, the deputy director of Buhairah Police station who is handling the case.

"Fire experts have already visited the scene and taken samples from the building for their examinations in the forensic laboratory," he said.

"As soon as the final report on the cause is completed it will be made public."

No decision has been made on whether the building will be repaired or demolished as authorities at the municipality and civil defence are still ascertaining its condition.

The burned out shell of Sharjah's Kuwait Hospital, which was devastated by fire in 2010, has been left unattended as municipality technical teams have still not decided what to do with the the building.