UAE residents still opting against fire insurance cover, brokers say

Although annual insurance cover can range between Dh300 to Dh1,300 depending on size of the home and its contents, the majority of owners and tenants are still opting not to protect their homes from fire, water damage or burglary.

ABU DHABI // Insurance brokers estimate that only five to six 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 to 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 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 by 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 is not mandatory are all reasons why so few people take 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 first-hand experience of such a tragedy after her childhood home in Florida was destroyed and rebuilt after a 2010 fire, 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 of took it right away,” she said.

Ramsey Chami, head of personal property at AIG Mena, warned that tragedies such as fires or burglaries can “happen to any of us, and they can often also leave people homeless”.

He said insurance was important in these instances as it provided the victims with alternative accommodation until their home is habitable again or they find a suitable alternative.

Ms Smiley said experiencing a fire can be devastating, with possessions lost forever.

“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.