According to industry experts, the recent severe floods in Dubai should serve as a reminder of the significance of obtaining home insurance.
They note that the percentage of UAE residents with home insurance is surprisingly low, with less than 15 per cent having coverage.
Inquiries about home insurance in the Middle East typically arise only during extreme weather events or fires, reflecting a widespread trend. However, this coverage could have provided valuable protection against the recent devastating floods in Dubai.
Andrea McNulty, head of product development at Yallacompare, emphasized the shockingly low uptake rates for home insurance. She noted that inquiries spike only in response to heavy rainfall or reports of fires in apartment blocks. In such situations, individuals may face the daunting task of replacing furniture, arranging alternative accommodation, and replenishing perishable items.
Home insurance offers protection against various risks, including natural disasters, floods, theft, and fire, for both the building and its contents.
Ms. McNulty pointed out that there are far too few people with this type of coverage, with fewer than 15 percent of consumers in the UAE having a home insurance policy. In the UK, approximately 25 percent of homes lack any form of home insurance.
She observed that this is often something people intend to address eventually but never follow through with purchasing. She mentioned that inquiries to the company have increased by 45 percent since Tuesday and are expected to continue rising through the weekend.
She emphasized that a decent home insurance policy can be as affordable as Dh1 per day. When compared to the cost of replacing everything without insurance, it’s truly a bargain. While home insurance may not completely reverse the damage, it does offer a sense of security amid uncertain circumstances.
The aftermath
A major clean-up operation is now under way across Dubai, but evidence of the storms was still apparent across the country on Thursday, with some roads waterlogged, cars abandoned and homes under water.
The scale of the damage is still hard to assess. Ms McNulty pointed to Cyclone Gonu in 2007 that swept through the region. “That damage was estimated at over $4.2 billion,” she said.
Anthony Cerchiai, head of general insurance at Nexus Insurance, informed The National that it was premature to gauge the extent of the cost, but it could potentially reach billions of dirhams.
“The best prevention is prevention,” remarked Mr. Cerchiai, adding that home insurance rates were low in the UAE. He highlighted that the Middle East as a whole was underinsured, with a focus mainly on mandatory coverage such as medical insurance. It wasn’t widely popular.
Mr. Cerchiai noted that calls to Nexus had increased tenfold since Tuesday and encouraged individuals to also consider travel insurance to ensure compensation in case of issues arising. “Insurance is the appropriate solution,” he affirmed.
Ms. McNulty mentioned that insurance companies would be working tirelessly to handle claims, advising affected individuals to contact their provider promptly.
“Certain insurers may have specific notification deadlines. This could be as short as 48 hours from the time of the loss,” he explained.
He emphasized the importance of taking numerous photographs of any damaged property and cautioned against attempting to move a waterlogged vehicle oneself, as this could exacerbate the damage.
