...and 3 reasons not toMay 26, 2015 9:00
Insurance: run for cover
Dubai residents “shockingly” lack life and contents coverage
September 5, 2013 2:15 by Muhammad Aldalou
Dubai residents are “shockingly” under-insured, according to the results of a survey released today by Fund Advisers.
Of the 300 respondents surveyed, over 90 per cent do not posses sufficient life cover, while 81 per cent of those living in rented accommodation in the emirate hold no contents insurance.
The report emphasises that although the UAE enjoys a low crime rate, possessions can still be stolen and properties can be damaged, which can lead to disaster without the correct coverage.
“If you live in a compound or tower and are deemed responsible for a fire or flood, you could be responsible for damages caused to others’ properties and possessions, in addition to your own,” states the report.
In November 2012, when the Tamweel Tower in Jumeirah Lakes Towers caught fire, displacing hundreds of residents, the issue of insufficient contents insurance was brought to light.
The survey also found that 72 per cent of clients surveyed had life cover but no critical illness cover or income protection.
Some respondents of the survey were covered by life insurance policies that were attached to joint mortgages, which meant that their property would only be paid up on the death of the second partner and not the first – which means that the insurance would not pay out until both partners died.
Additionally, a study by Zurich Insurance Group, released in July, revealed that approximately 60 per cent of residents have never purchased travel insurance.
The low rate of insurance penetration is not limited to Dubai or the UAE, but to the GCC region as a whole. However, this is expected to change according to the its GCC Insurance Report, released by Alpen Capital in July, which concluded that the insurance penetration in the region is expected to improve from 1.1 per cent in 2012 to two per cent in 2017.
Non-life insurance penetration, which is likely to surge from 0.9 per cent to 1.9 per cent during the period, is seen as the main driving factor behind this.