‘Only 6% in UAE take out home insurance’

Blaze at The Torch wakens residents up to need for cover, but survey suggests few actually act upon their concerns.

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DUBAI // Only six per cent of UAE residents have home insurance cover compared to 76 per cent in the UK, according to a YouGov survey commissioned by an insurance company.

The survey found that 27 per cent of respondents said blazes like The Torch and the fire in 2012 at Tamweel Tower in Dubai had encouraged them to consider purchasing home contents cover.

“Over time, you accumulate thousands of dirhams worth of items – furniture, jewellery and the value of your content increases,” said Zahir Sharif, UAE manager of insurer Zurich, which commissioned the study.

“Not everyone understands the value of their contents. If they are insured, they will be paid back, depending on what their insurance is, for the value of their content.”

But the majority of residents do not follow up their concerns by taking out insurance.

The big difference between the UAE and the UK is people’s perception of insurance, Mr Sharif said.

“A lot of them feel Dubai is a safe place and they’re not here for long, or they buy furniture from Ikea, so they don’t think about how important insurance is, or the risk of theft is low. They think, why spend money on home insurance when they could spend it on something else when, in fact, insurance is as little as Dh1 a day and the cost in this market is relatively inexpensive,” he said.

Melanie Euverte, a 30-year-old French resident who lived on the 50th floor of The Torch had no insurance.

“Everything in the living room was burnt and there was water everywhere,” she said. “It was a pool when I walked in. It’s terrible.”

Although her employer has rented a hotel room for her for a month and bought her a new laptop, she has lost valuables.

“All my furniture is gone,” Ms Euverte said. “I had an amazing bookcase and there is nothing left. I only managed to save a few clothes which I have put in storage.”

She said she would contact her credit card insurance to find out whether or not she could be compensated on any of her most recently purchased items.

“I’ve taken pictures so let’s see,” she said. “In Dubai, it’s not like in France, we just don’t think about it. My sad example should serve as a lesson to everyone because it has really served as one for me.”

Almost half the survey’s respondents identified fire as the biggest threat to their homes, followed by electrical faults at 16 per cent, theft at 11 per cent and building faults and flooding at 10 per cent each.

“In Dubai, a lot of expatriates don’t have home contents insurance,” said Zoe Turner, an independent financial adviser for insurance company Global Eye. “In the UK, it’s pretty much unheard of. Almost everyone would have buildings and contents insurance put in place.”

She said the reason could be due to the transitory life most expatriates have in the UAE.

“They don’t tend to be here for long periods at a time so maybe they just don’t place value on possessions as much,” she said.

“People maybe don’t view it as their forever home but it’s something that needs to be highlighted a lot more in the UAE. Emotionally, fires already have an impact on you but at least insurance can release the financial burden.”

Ms Turner said insurance could cost as little as Dh1,000 a year for a villa.

“In apartment blocks, the risk of things like this happening is so much higher because you’re relying on other people to follow safety regulations,” she said. “People are going to be careless and I’m surprised this doesn’t happen more often.”

Mr Sharif said there tends to be a dramatic surge in home insurance after fires.

“The same is happening now but it’s a challenge because it’s not consistent,” he said. “It takes an incident for people to realise but there needs to be consistent understanding of what insurance is and what it does.”