Just a week back, a fire breaking out at The Palm’s Oceana apartment complex made headlines in the UAE. And yet again the topic of ‘Home Insurance’, or rather the lack of it, resurfaced.
Not sure if the risks outweigh the cost of getting home insurance? Wondering how and why home insurance claims get rejected? We help you steer clear of the misconceptions surrounding the topic of home insurance.
The Souqalmal team gets in touch with Sameh Hafez, Vice President – Customer Proposition & High Net Worth at Oman Insurance Company to better understand some of the most common risks that UAE homeowners and tenants face. With over a decade’s worth of experience in the UAE insurance industry, Sameh also helps us delve deeper into the topic of home insurance claims and the top reasons why claims get denied.
What are the top three reasons or risks that cause accidents in UAE homes?
The three major causes of losses we see in the UAE, in no particular order, are due to water damage, fire and accidents. The frequency of claims has remained stable over the past few years, however we have seen slight upticks in sales whenever there’s any major fire in the news. Unfortunately, overall, the penetration rates of home insurance in the UAE and the rest of the Arab world remain low. This is mainly due to lack of awareness with regards to the benefits and affordability of home insurance plans.
Although we may hear much about fire losses in the UAE the likelihood remains remote when compared to more common exposures. For example, many UAE residents may have suffered a burst pipe and ensuing water damage at least once during their tenure in the UAE. However, not many know that there are home insurance policies that would cover the damage caused by water from a burst pipe.
Another example of a common loss that’s insurable is Accidental Damage. Many people may lose valuable items whether by theft or by damage. Such exposures are insured, and in some cases carry worldwide extensions.
Which are the most frequent reasons for claim rejections?
With regards to rejected claims, insurance companies would typically decline any loss or damage not covered within the policy terms and conditions. Most contracts exclude damage due to mold or vermin or damage to clothing, and such claims would be declined. It is advisable for the insured policyholders to read their terms and conditions carefully to ensure that they are buying coverage adequate for their exposure.
Fraud unfortunately is one of the most common causes of claim rejection. Fraudulent claims unfortunately may cause insurance premiums to be escalated for everyone and therefore we spend a lot of effort to minimize or eliminate such claims.