The surge in demand for comprehensive insurance packages has skyrocketed by up to 100% in the aftermath of the recent heavy rains that inundated various parts of the UAE, particularly Dubai, Sharjah, and Ajman.
This surge follows a stark realization among vehicle and homeowners that third-party liability (TPL) insurance plans offer inadequate coverage against damages incurred during natural disasters like floods.
The unprecedented rainfall on April 16, the heaviest in 75 years, triggered widespread flooding, prompting a flurry of insurance claims for vehicle and property damages. Some insurance companies reported an astonishing 400% increase in claims volume, underscoring the urgency for more comprehensive coverage options.
To address the heightened risk perception among consumers, insurance companies have responded by hiking premiums for comprehensive insurance by as much as 30%. This adjustment reflects the increased exposure to natural disaster-related claims and the need to mitigate financial risks for policyholders.
Industry experts note a significant shift in consumer behavior, with a surge in demand for comprehensive insurance across both motor and property segments. Saloons, sports cars, and coupes, particularly vulnerable to flood damage, are witnessing the steepest premium hikes, reflecting the higher risk associated with these vehicle types.
Executives from leading insurance brokerage firms confirm the uptick in demand for comprehensive coverage, attributing it to a growing awareness of the need for broader protection against unforeseen events. Avinash Babur of InsuranceMarket.ae emphasizes the industry's focus on evaluating claims and providing timely support to affected individuals, signaling a proactive stance amidst the evolving situation.
While some insurers have yet to adjust premiums post-rainfall, industry insiders anticipate future rate increases in response to the escalating claims burden. Faisal Abbas from the Continental Group predicts a potential premium hike in the coming quarters, reflecting the industry's ongoing reassessment of risk exposure and pricing dynamics.
In light of these developments, consumers are increasingly opting for comprehensive insurance plans, recognizing the value of comprehensive coverage in safeguarding their assets against natural disasters. Toshita Chauhan of policybazaar.ae highlights a notable shift among customers, with a significant majority opting for comprehensive plans over basic third-party liability coverage, underscoring a growing emphasis on comprehensive risk management strategies.