UAE residents ‘undervalue home contents by half’
Dubai, November 20, 2012
UAE residents may underestimate the value of their home contents by almost half (44 per cent), according to a study released today by Zurich, one of the world’s leading insurance groups.
The Zurich UAE Home Appraisal Study, conducted in partnership with market research company YouGov, asked a selection of UAE residents to complete a categorised form detailing how much they thought the contents of their home were worth.
A specialist advisor from Zurich then visited each home to conduct a full room-by-room appraisal to enable a detailed comparison between the perceived and actual value of a home’s contents.
On average, the participants in the study perceived the value of their home contents to be worth Dh199,700 ($54,355), while the actual average value was Dh337,350, a difference of Dh137,650.
All participants in the study underestimated the value of their home contents by at least a fifth, with estimates ranging from 22 to 66 per cent below actual value, giving an average underestimation of 44 per cent.
In monetary terms, participants underestimated the actual value of their home’s contents by between Dh27,500 and Dh360,000.
Jeremy Baggott, general manager, Zurich’s General Insurance Business in the Middle East, said: “Since Zurich began offering home insurance in the Middle East in 2011, we have noticed that many customers significantly underestimate the value of their home contents, so we decided to conduct this research to get a handle on the extent of the issue.”
“Although this research only provides a snapshot, we were genuinely surprised by quite how large the gap between the perceived and actual value of a home’s contents appears to be in the UAE.
“All the participants in our study were out by at least a fifth – and some by as much as two thirds – suggesting that many UAE residents would be in for a big shock if they were forced to replace their home contents due to unforeseen circumstances,” he added.
As part of the Zurich UAE Home Appraisal Study, YouGov also conducted in-depth interviews to understand the reasoning behind perceptions about the value of home contents.
The majority of participants said they expect to either move home or move country in the future and, conscious of moving costs and potential damage in transit, had limited the amount they had spent on furniture and other items.
In addition, the longer respondents expected to be living in the UAE, the more and higher quality the furniture and other items they tend to purchase. Regardless of their anticipated time in the country, Zurich’s study found that most residents have accumulated many more possessions, both in terms of quantity and value, than they realise during their time in the UAE.
Of all the objects in a home, the study revealed that clothing was the area where participants most underestimate actual values, with the majority of participants significantly miscalculating the amount of clothing in their wardrobes and how much it would cost to replace each item.
“Zurich’s study identified a common misconception among UAE residents that because they are renting and tend to purchase mainly functional items, the value of their possessions is low,” Baggott said.
“Yet after just a few years in the UAE, many people will have accumulated a significant amount of possessions that would cost a considerable sum to replace in the event of a loss. This study highlights the importance of UAE residents putting in place some level of financial protection against the unanticipated,” he added. – TradeArabia News Service