An astounding 95 per cent of home owners in the UAE do not have insurance that covers their property and belongings, so if the unforeseen happens, they may be left with the cost of replacing any loss or damage out of their own pocket.

Industry insiders say the low penetration rate of home insurance can be partly attributed to the transitory nature of the expatriate population in the country, as well as the lack of awareness campaigns.

Unlike in other markets, getting home insurance is not a mandatory requirement when renting a home in the UAE. In Europe and the US, home insurance is a must for those who purchase a property through a mortgage. The lender will insist on this requirement before approving the loan. "Despite the high volume of property sales in the UAE, home insurance penetration is an astonishing low of five per cent. This may be due to the fact that many people see themselves as being in the region on a short-term basis, therefore avoiding investing too heavily in home furnishings," notes David Hunt, head of insurance for Middle East at HSBC.

A source from a major insurance firm says their penetration rate among tenants is even lower, around one per cent.

Even when insurance has been taken, it is generally the banks which are pushing for this, since they're the ones who finance the properties and they need to see their mortgage being protected, according to Sanish Velayudhan, deputy general manager at Gargash Insurance.

"Traditionally, low awareness of insurance as well as the fact that this is not a litigious society, have been some of the factors for home insurance not being in demand," he adds.

Rumi Sanjana of Nexus says there is also a general belief that people only need to take out general insurance to protect their property against theft.

"And as the UAE has a very low crime rate, residents here often take comfort in the knowledge they are unlikely to be affected," he adds.

Abu Dhabi Commercial Properties (ADCP), a real estate management firm, which earlier looked into the uptake of home insurance, also confirms the trend. It says the low demand for home insurance has not been encouraging enough for insurers to actively sell it.

"Tenants tend not to take up such coverage and therefore insurers find this household coverage products not commercially attractive for their businesses to promote widespread," Noel Roberts, head of asset management at ADCP tells Gulf News.