The huge fire at the tony hotel in Dubai on the New Year’s Eve led to strong reactions from everyone. The inferno at the luxury 63-storey hotel, The Address, has sparked fears and concerns regarding fire safety in buildings.
Dubai is home to some of the tallest skyscrapers and with the ‘ease’ with which The Address burnt has led to serious concerns about fire safety, and knee-jerk reactions to the incident. In fact, the Dubai buildings are ‘now’ being labelled as ‘infernos’ waiting to happen by a lot of residents.
This has predictably also led to some knee-jerk reactions; suddenly, the home insurance sector is seeing a massive growth in demand. In the aftermath of any disaster, insurers typically see a rise in the demand for home insurance. It is also true that Dubai traditionally has had a very ‘low rate of home insurance adoption’ by the residents. There is a reason for this. Typically, the Dubai buildings are ‘so safely built’ and conform to the highest standards of fire safety rules that there is no question of buying insurance. That is not even part of the question for home buyers or people buying property to start business in UAE or for LLC Company Setup in Dubai or Freezone business setup Dubai.
The recent incident has however, changed things. The popular home services website MoveSouq.com is seeing a rise in inquiries about the home insurance policies. Following the fire break-out, the insurers are seeing an unprecedented rise in the demand for insurers and questions being asked on fire safety regulations for the tall buildings. These questions were previously never asked.
Is it a good thing?
Any disaster of a huge magnitude always brings about knee-jerk reactions from people-at-large. The recent fire has also brought about a lot of knee-jerk reactions. Insurance is always a good thing – if there is any disaster, then at least as an owner, you are covered for loses suffered during that disaster.
This incident forced a lot of homeowners, residents and office space owners to re-look their own security especially regarding the fire safety norms. This is good since it ensures that there is a two-line check for fire safety regulations. From the owner’s perspective, there is a check in ensuring that at least the fire safety regulations are not overlooked.
It is also true that the adoption rate for home/building insurance is higher amongst the owners rather than tenants. Also, the awareness and the recognition of the need for home insurance are comparatively higher amongst the expats rather than the native residents of Dubai/UAE. This has always been the case. The West has always conformed to certain safety standards and this has now, percolated down to the residents of Dubai.
Traditionally, the houses in Dubai/GCC region was built of stones and as such, the thought of most residents was that the risk was minimal so why take out insurance. Insurance is expensive and needs to be paid every month. The cost was a major deterrent; however, with the fire break-out, it has now become critical to think of buying insurance.
The fire has at least done one service – people are now aware and are asking for home/building insurance!