A steep increase in home insurance is being witnessed in the UAE, with a majority of Dubai residents not having one, a study from ServiceMarket has revealed.
Emre Guclu, head of insurance at ServiceMarket said: "We often experience a peak in home insurance sales after incidents. People don't like to think about risks until something rather dramatic happens. However, it's better to cover yourself in advance and have the peace of mind. After all, no one can predict what might go wrong when."
Around 90 per cent of people do not have home insurance in Dubai, and therefore after certain cases, residents are likely to be left with huge bills to replace their home contents and personal belongings. People often do not realise how much their belongings are worth; the value of basic furniture, electronics and clothing can easily exceed the cost of a car.
Many Dubai residents have an "it would never happen to me" outlook when it comes to buying home insurance. However, home fires are one of the most common reasons for home insurance claims. In 2016, there were 215 reported fires in residential units in Dubai - more than one fire every two days. Some of the most common reasons for home fires are electrical equipment (such as irons and hair straighteners), faulty electrical wiring, smoking and barbeques.
Home insurance does not only protect you against fires though. It can also protect you against things like flooding, theft and even loss of personal belongings. An important aspect, that many people overlook, is that if a fire or flood were to originate from your property then you would be liable for all damage that it causes, including that to other properties. Your home insurance policy would typically cover damage to third parties as well.
We often experience a peak in home insurance sales after incidents. People don't like to think about risks until something rather dramatic happens. However, it's better to cover yourself in advance and have the peace of mind. After all, no one can predict what might go wrong when.
"There is rise in purchase of home insurance due to recent fires in high rise buildings where fires have taken place due to cladding and other defects. Residents had to vacate houses till building is reinstated. Loss of rent, loss to belongings, cost to stay at another place plus other misc costs add financial and mental burden. Every year few towers are catching fire in various emirates. Insurance is being taken by residents to cover contents and loss of rent," said Jasjeet Bindra, managing director of Howden Insurance Brokers.
"Owners of towers are also taking insurance while a decade back many buildings were not insured while these days mostly are insured while some owners go in for Strata Insurance specifically meant to insure high-rise towers. Looking at fires in high-rise buildings, people are taking insurance for their villas and low-rise flats, which is out of fear. In addition, third-party liability policy is also being taken in conjuction with property all risk policy."
The survey by ServiceMarket revealed that 42 per cent of respondents without home insurance didn't see the point of buying home insurance since they were only renting their home. However, these people didn't realise that protection against structural damage (home building insurance) is just one aspect of home insurance: it can also cover your home contents like furniture and applicants and personal belongings such as jewelry, laptops and smartphones.
Home insurance can even protect possessions that you carry around. The type of insurance you buy does depend on whether you own the property or are a tenant though. If you own the property you should make sure to have building insurance to cover the property against structural damages. If you live in the property (even if you are just renting) then you should have home contents and personal belongings to protect you against damage to your belongings. Your insurance policy may also cover you against liabilities to your landlord if you accidetally damage the property, the ServiceMarket report says.
Varun Kalia, executive director at Dana Insurance Broker, said: "A major part of earnings or savings are invested in making our home. Unforeseen accidents caused due to fire or natural climates costs dearly in replenishing, if the home is on mortgage than repayments of loan is added burden on top of paying for alternative accommodation. The suffering increases more if one is held responsible for causing the fire as he is legally liable to financially compensation to effected third parties. A simple home insurance policy may take off the financial burden with a nominal cost."
This article was originally published here on khaleejtimes.com