Business | Property
Rains bring home insurance into focus
The storms that hit the UAE a fortnight ago have left homeowners with massive bills and clean-up costs and insurance companies saw a spike in claims.
- By Suzanne Fenton, Staff Reporter
- Published: 23:39 January 29, 2008
- 110 millimetres of rain exposed the lack of proper infrastructure in Dubai's upmarket freehold areas. Dubai government's new law is expected to address these problems.
- Image Credit: Gulf News Archive
Dubai: The storms that hit the UAE a fortnight ago have left homeowners with massive bills and clean-up costs and insurance companies saw a spike in claims.
However, with less than 10 per cent of Dubai's 1.44 million population having home insurance, insurers note that people are not adequately insured against events like flooding.
Michael Walton, director of General Insurance at Nexus Insurance Brokers, says: "Situations like the January rainstorms highlight the necessity of adequate insurance and dem-onstrate the challenges posed by the high number of under-insured and uninsured properties in the UAE."
Meanwhile, the new government regulations brought in by Dubai's Real Estate Regulatory Authority (Rera) are trying to tackle the problem of inadequate home insurance.
Legislation
Marwan Bin Galita, CEO of Rera, believes that the new legislation will protect homeowners, "The owner should insure the building to cover the risk of happenings such as demolition or collapse. This compulsory home insurance is a new thing for Dubai."
The reasons why so many people in Dubai lack home insurance are unclear.
With various insurance companies offering anywhere between Dh50,000 and Dh100,000 worth of home cover for premiums of Dh250 to Dh400 a year, and others offering Dh150,000 to Dh200,000 worth of home cover for annual premiums of Dh600-800, it is unlikely that cost is a factor.
The Gulf region has been underinsured for religious reasons also, but now Takaful insurance is available in keeping with Islamic law, experts say.
In Dubai particularly, with its relatively low crime-rate, people don't feel the need to insure their homes against crimes such as burglary or vandalism. Also, as Dubai has a very transient population, most people don't take out home insurance on their rented properties. A general lack of awareness is a common reason given for the shortfall.
However, Michael Walton warns that home insurance is vital. "Given that experts believe climate change will result in more extreme weather in the coming years, it is likely that the associated problems will increase, unless people insure their assets."
The other Rera regulations have also been specifically designed to protect homeowners.
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