Why only 1 in 10 protected with home insurance?

Posted on: 18th September 2018 in Insurance

Most of us wouldn’t consider driving a car without insurance, or purchase a home without protecting our investment from losses incurred through fire, flood or damage – yet new research has revealed that nearly 90% of UAE residents choose not to protect their home contents and valuables! A poll conducted by yallacompare has revealed that only 11% of UAE residents have home and contents insurance, with nearly a quarter stating the perceived high cost of insurance as the reason for not taking out a policy. Compare this with the UK, for example, where over 75% of the population has a home contents insurance policy. Without home contents insurance you leave yourself vulnerable to unexpected damage, loss or theft – so why are so many people gambling with their possessions in the UAE?

Home contents insurance – Pros and Cons

Pros:

A lot cheaper than replacing all of your household belongings!
Cheaper than you think (less than Dh20 or £4 per month).
Peace of mind that the contents of your home are covered.
Option to cover your most valued possessions wherever you are.
Easy to organise and pay for (monthly premiums).

Cons:

It’s an additional cost to find in a month.
If you have many individually valuable items (jewellery, watches, a collection of designer handbags for example), you may need extra cover.

Why do so few UAE residents have home contents insurance?

The yallacompare poll revealed nearly a quarter of residents believed that home contents insurance policies were too expensive, while the same number felt there was no point in the insurance. The poll also revealed that 12% of tenants were under the mistaken belief that contents insurance was covered by the landlord.

How much does home contents insurance cost?

Despite cost being the top reason UAE residents gave for not purchasing contents insurance, average home content policies in the UAE cost around just Dh220 a year. That’s not a lot compared with the cost of replacing everything in your home in the event of calamity.

Is home contents insurance worth it?

Consider how much it would cost you to replace all of your possessions, your electronic equipment, your furniture and appliances? Now add on the cost of everything that is in your wardrobe (including, ladies, all those shoes you forgot you bought!). Adding up isn’t it? Compare that to home contents premiums that can be as low as dh20 a month.

How vulnerable is my stuff?

Last year, residents of Dubai Marina’s Torch Tower were caught unawares by the second fire to strike the building in two years. Similarly, residents of Tamwheel Tower in Dubai’s Jumeirah Lake Towers were reminded of the importance of home contents insurance in 2012 when fires gutted the building, leaving many residents homeless and their possessions destroyed. Repairs took over five years to complete with many residents only moving back in last September. Unsurprisingly, insurance companies experienced a massive rise in enquiries following the fires (RSA Insurance reported a 400% increase in enquiries and a 90% rise in policy purchases following the Torch Tower blaze). But do residents become complacent when it comes time to renew? Once the danger is over, it’s fair enough to forget about it, right? While fire obviously poses a risk to your possessions (particularly if you live in a high-rise apartment) electrical malfunction is another common risk factor. 27% of respondents to the poll said that electrical malfunction had been a risk factor within their own homes. Consider also the amount of time you spend away from your property, on holiday for example. Properties are more vulnerable during the holiday season when they are left for longer periods of time unattended. Major causes of damage to property in the UAE include fire and water (leaking pipes etc).

Am I covered by my landlord’s insurance?

No, it is the landlord’s responsibility to insure his property and any contents that are his – but your belongings are your responsibility.

What does home contents insurance cover exactly?

Standard insurance policies typically cover your possessions against fire, explosions, earthquakes, flood and storm damage, as well as leaks and theft. Your personal possessions are defined as furniture, clothes, electrical items etc. Check with your IFA to see what the different policies cover.

What’s not included?

Specific items that exceed a certain value (set by the insurer). Cover for accidental damage can be added as an optional extra to the standard policy. Personal Possessions Cover: This optional extra covers specified items of value (such as jewellery, designer handbags and personal electronic devices for example) outside of the home, and can offer additional peace of mind for your most valuable possessions wherever you are.