 Dubai Marina Torch Tower© Guilhem Vellut [4], CC BY 2.0 [5] |
This incident illustrates once again the lack of interest by the local market to home insurance. The UAE has recorded a very low penetration rate for this kind of risk.
According to some analysts, the impact of that event on underwritings will be higher than that recorded after Tamweel Tower fire in 2012. Only 6% of the population had underwritten a householder’s comprehensive insurance in 2013.
The lack of enthusiasm of the Emirati for this kind of coverage is explained by ignorance of such insurance. Potential customers see no need to ensure the content of their homes as the crime rate is very low in the UAE. In addition, tenants generally think that the insurance underwritten by the owner also covers property.
As a reminder, the cost of repairing the Tamweel Tower amounted to 21.2 million USD, much of which was borne by tenants who did not have insurance.