Bad news: 94% of UAE residents don’t have home insurance

Bad news: 94% of UAE residents don’t have home insurance
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Published November 14th, 2013 - 12:38 GMT via SyndiGate.info

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Zurich’s recent findings are quite opposite to the trend about a year ago, where a spike in consumer interest in home contents insurance was noted after a massive fire broke out at a residential tower in Dubai
Zurich’s recent findings are quite opposite to the trend about a year ago, where a spike in consumer interest in home contents insurance was noted after a massive fire broke out at a residential tower in Dubai
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Zurich
,
Dubai
,
Holborn
,
Brian Reilly
,
Steve Gregory
,
Zahir Sharif

About nine out of ten people in the UAE risk incurring significant monetary losses should unexpected perils like fire, flood or storm cause damage to their valuable possessions.

A study commissioned by Zurich last month showed that among the 1,009 surveyed residents in the UAE, 94 per cent do not hold insurance cover for their home contents.

The low insurance penetration rate is most pronounced among tenants in the country, with only 4 per cent reporting they have home contents insurance, compared with 22 per cent of home owners.

Financial and insurance experts said misconceptions about insurance are leading a lot of people to neglect securing protection for their home furnishings, appliances and other valuables against unexpected risks.

A common misconception among tenants is that landlords are the ones liable if possessions in their home are damaged in cases where there is water leakage or fire. A lot of consumers also believe that their valuables are not worth insuring.

“Another misconception is the cost of home contents insurance. Many people believe it’s expensive to have insurance, but you can insure your home contents for less than Dh1 a day,” said Zahir Sharif, head of segment, personal and small business for Zurich Middle East.

“Many people [also] disregard the biggest risk to their home - water damage. From our own claims experience in the UAE, burst pipes and leakage from air conditioning units are the most common causes of damage. Yet, as highlighted by our research, water damage from an internal or external flood is not considered a high risk,” Sharif told Gulf News.

Steve Gregory, managing partner at Holborn Assets, agreed that there is quite a number of misconceptions about insurance, citing that many tenants believe only landlords can insure their own property, while others simply don’t care.

“Tenants think insurance is not affordable when in fact it is cheaper than most parts of the world. Some people simply don’t care and don’t expect a problem to happen to themselves,” said Gregory. He pointed out that under the UAE Law of Tort, anyone held responsible for damage to other people or their belongings can also be made to pay for that.

“Torts are civil wrongs recognized by law as grounds for a lawsuit. These wrongs result in an injury or harm constituting the basis for a claim by the injured party, whether physically injured of suffering loss to personal belongings. Third party liability insurance is usually included in home contents insurance plans,” he added.

Zurich’s recent findings are quite opposite to the trend about a year ago, where a spike in consumer interest in home contents insurance was noted after a massive fire broke out at a residential tower in Dubai.

In last year’s survey, 27 per cent of respondents admitted that the fire in Tamweel Tower on November 18, 2012 had encouraged them to consider purchasing home contents cover. Zurich’s call centre also experienced a 200 per cent increase in customer enquiries in the two weeks following the incident.

“The JLT fire created a surge in awareness across the UAE about fire, risk and insurance, but this quickly dropped off and it is doubtful that it had a lasting, long-term effect on people’s attitudes,” said Brian Reilly, chief executive officer of Zurich’s general insurance business in the Middle East.

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