Jeddah, Feb 11(Arab News): A number of homes affected by the recent floods in Jeddah are not covered by their insurance policies, according to an industry expert from the Jeddah Chamber of Commerce and Industry (JCCI).

Adnan Khoja of the JCCI’s insurance committee told Arab News that a low number of homeowners have taken out home insurance and that there is no real public awareness of the necessity of such coverage.

“Under Saudi regulations, no insurance company is allowed to dodge its insurance commitments or responsibilities,” said Khoja.

“Insurance companies generally do not cover natural disaster damage, unless of course it is included within the purchased insurance policy. Many homeowners and small businesses opt out of buying insurance for their properties, deeming it unnecessary.”

Following the Jeddah flooding, there were rumors that insurance companies were considering stopping their services in vulnerable areas. “Under the regulations, insurance companies cannot stop providing services in areas they have been issued licenses,” Khoja said.

Insurance claims after the Jeddah flooding, he said, were mainly from car and medical insurance policyholders. Property insurance claims were minimal.

“Insurance companies might be considering raising their price limit for services, as natural disasters and its damaging effects on properties are becoming the norm in Jeddah,” said one insurance agent who did not want to be identified.

“There isn’t a clear end figure for all the losses a local insurance company will have to compensate flood victims for, as more people are coming forward with their claims to their companies.”

Insurance payouts have been independently estimated to be worth more than SR300 million.