Comparison website yallacompare has witnessed a 100% increase in the number of home insurance policies being sold since the Zen Tower fire in Dubai Marina on Sunday, CFO Jonathan Rawling told Arabian Business.
Rawling said it is common to see a surge in residents buying insurance following a fire incident.
“That’s usually the way that things play out after a fire is reported. People see the news coverage, and for some that’s enough of a push towards getting their belongings covered,” he said.
Nexus Insurance Brokers have also seen a rise in residents buying home and contents insurance in the wake of the fire, though they expect it to be short-lived, following the same trend as previous incidents.
“We are definitely busier than usual with enquiries for home insurance since news of the fire, and this is a pattern we have observed after similar incidents in the past,” said John Waldron, head of private clients at the firm.
“When a fire happens, you do see that immediate response, and there is a brief surge in new business enquiries. After the fire in the Torch Tower last year, we saw a massive spike in enquiries coming into the market for maybe a three-to-four week period, but then the interest essentially reverts to typical volumes,” he added.
Waldron pointed out that penetration rates of home insurance in the UAE remain extremely low by international standards.
Yallacompare’s Rawling also expressed concern for low home insurance penetration rates in the UAE, stating that only 11% of UAE residents are signed onto a home insurance policy compared to around 70% penetration rates in Europe, according to research by the website.
One of the main reasons behind the low rates is a perception among UAE consumers that insurance policies are too expensive, though sites such as Yallacompare offers insurance packages as low as AED200 for up to AED 50,000 worth of contents.
Waldron agrees and urges residents as well as landlords to cover their contents to avoid paying hefty post-damage amounts.
“If you don’t have any insurance cover, you’re going to be out of pocket, and that’s one of the things people don’t think about. If you’re the owner of investment rental properties, home insurance policies will give you some level of cover against loss of rent as well. A big fire can put these buildings out of operation for a considerable length of time, and a landlord can be at a rental deficit for that period if not insured adequately.
“If there is a fire, it is not the landlord’s responsibility to provide alternative accommodation to their tenant while repairs are ongoing. Therefore, having cover in place for this through home insurance can save the insured thousands of dirhams in the long run, as costs can spiral for alternative accommodation if the damage to the affected property is extensive,” he added.
Waldron notes that other incidents including flood, accidental damage and theft are more reason to get covered.
“A vital cover which is embedded in home policies is for alternative accommodation, which covers the insured against the cost of finding somewhere to stay if their own home is rendered uninhabitable due to an incident,” he said.For all the latest banking and finance news from the UAE and Gulf countries, follow us on Twitter and Linkedin, like us on Facebook and subscribe to our YouTube page, which is updated daily.
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