Policyholders in Saudi Arabia pay SR 1.8 billion a year for fire insurance, said a local expert.
Ahmed Al-Reqeibi said in a statement that insurance companies have experts to conduct evaluations after a fire to counter inflated claims.
“Insurance is a means of risk management. Any loss caused by a fire accident is passed to the insurance company, which has the financial capacity to compensate for the losses,” Al-Reqeibi said.
He added that insurance companies sometimes increase premiums or refuse to provide insurance cover for those who do not install safety measures. Incentives are provided for firms that implement all safety measures and reduce risks to a minimum.
According to official statistics, 29,870 fires were reported last year, causing losses of SR 211 million and 1,160 injuries and deaths. The report also revealed that the two common causes of accidents in the Kingdom are electrical short circuits, at 35 percent, and children playing with fire at 27 percent.
According to the CEO of the Al-Haram Plaza in Riyadh, where there was a huge fire on Saturday, the losses were estimated at SR 40 million. The fire was detected before 7 a.m. and continued until noon, with only a few of the goods salvaged.
He said the Plaza will increase its insurance cover because it is only covered for SR 20 million, which is half of the estimated loss even though no loss of life was reported.
He said the cause of the fire has not yet been identified and that investigations are currently underway.
Saudi insurance companies paid out about SR 488 million in claims during the period between 1995 and 2005, an earlier report said.
In 2007, the National Committee for Insurance and the Civil Defense recommended compulsory fire insurance in buildings.
