Dubai record rains of 2024: UAE property owners find home insurance premiums are still rising

Dubai: It’s been exactly a year since the rains and the flooding in Dubai – but for property owners there will be no easing up on what they pay as insurance on these assets.

“There’s been a 17% increase in home insurance premiums from Q4-2024 to Q1-2025,” said Avinash Babur, CEO of InsuranceMarket.ae. “We believe the UAE market for home insurance is still in a recalibration phase where premiums are adjusting based on more accurate risk assessment.

“While going forward, there may not be any more sharp spikes in premiums, we wouldn’t yet call it fully stable.”

And the insurance costs do add up to a lot. Typically, these range between 0.25%-0.5% of the property value, and in some areas that are prone to water logging after heavy rains, homeowners in those locations are in for an additional premium charge.

"We’re seeing an average increase of around 15% on renewals for home insurance policies issued after April 2024, with some variations based on location, property type, and claims history," said Babur.

For newer homeowners in Dubai, it’s another cost detail they need to factor into their calculations. Others decided to go the extra mile and add insurance coverage to not just their homes but what's inside the homesteads.

“Only those property buyers using mortgages need to actually take home insurance (and life insurance),” said a consultant. “But after the April 2024 rains, property owners are getting wise to the need to have proper insurance coverage, irrespective of whether they have a mortgage or not.

“April 2024 rains and flooding was unprecedented – but that’s a lesson many property owners have absorbed.”

According to Babur, property owners who were hit with flooding and damages had a fairly smooth experience in getting their claims approved by insurers.

“Residential property claims were generally processed more smoothly and quickly than commercial real estate related ones,” said Babur.

“This is largely because residential policies are more straightforward - they involve fewer stakeholders. Many claims—especially those under Dg10,000— also didn’t require formal loss adjustor surveys.

“The nature of damage in homes, such as to personal belongings or furnishings, is also typically less complex, allowing for faster approvals."

A year on from the rains, it has been a learning curve for everyone associated with the property market, whether that's developers, architects, owner associations and facilities management companies. Some of the residual impact is still being felt.

Homeowner associations had been working overtime to replenish the reserve funds tied to their buildings and communities, which had been used up to effect repairs after the 2024 floods. There has also been a hike in the service charges that property owners in the various freehold locations have to pay annually for the upkeep of those developments.

As for developers, they had to re-learn some of the things they need to do and ensure 'rain-proofing' what they are building.

"Everyone in the industry learnt something after April 2024," is how the CEO at one leading real estate developer put it.

It's a sentiment many will share...