Though the UAE has a low crime rate when compared to the rest of the world, there is a risk of fire, flooding, etc. If you are staying on rent in the UAE, the owner of the property is legally required to insure the property. If you have mortgaged property, the tenant has to insure their items.
You may wonder why you must get a home insurance. Home insurance will recoup for damages in the event your house is broken into and your possessions are stolen or if your products are damaged in fire, flood, etc. If you have financed your home with a mortgage, the lender will require you to have a home insurance coverage to protect your home from damage caused due to natural disasters and unforeseen circumstances.
Home insurance in the UAE
Home insurance is required in the UAE if:
- You are a renter: You need to insure your home contents and personal possessions. The appliances, fine art, furniture, etc. are covered under content insurance. Personal possessions will cover for valuable that are carried outside the house such as jewellery and electronics. The items will be repaired or replaced following damage due to vandalism, theft, flooding and fire.
- You are homeowner: Homeowner must take a building insurance that will cover home which includes roof, walls, windows, etc. if it is damaged by natural disaster, theft, flooding, vandalism or fire. Building insurance will cover for lost rent, injury to family members inside the house, and lock replacement. If you have an apartment, you can take home insurance only for your unit. Homeowners can also add home contents and personal possessions coverage.
Coverage of home insurance in the UAE
Annual premiums for home contents and personal possessions are 0.5% of the total coverage value. If you have a two bedroom rented apartment, the premium will cost roughly around AED950-1,350 per year and you will get a coverage of AED200,000. One bedroom apartments will cost you AED800-1,200 per year and the coverage offered will be AED150,000. You must know the rough estimate of the value of your possessions and contents before you ask for a quote.
Annual premiums for a one bedroom building insurance is 0.1% of the rebuild value of the home. The insurance is priced according to the age, the rebuild value of the property, risk in its location, and history of damage. A two bedroom apartment’s building insurance premium will be around AED3,000-5,000 per year and the coverage will be up to AED4,000,000. The apartments which have more than 5 bedrooms will have premiums ranging from AED9,000-12,000 per year and the coverage will be up to AED10,000,000.
What is Home content insurance in the UAE?
Most people assume that when they are taking a home insurance, it covers the loss of their contents as well. When you are taking a home insurance ensure that there is content insurance and personal possessions as well.
Content insurance is a specific type of home insurance that provides protection to policyholders against loss of personal belongings and content. Higher value your contents are, the higher are the premiums.
What are the contents and personal belongings?
Contents will include:
- Household goods
- Fine art
Personal belongings include:
- Mobile phones
The above contents and personal belongings are covered against losses caused by earthquake, flood, lightning, water leaks, fire, etc.
The physical property is also covered under property insurance. Harm done to wall, floor, ceilings, etc. which is caused due to earthquakes, fire, floods and lightning are covered. But property insurance will not cover for wear and tear or damage done by terrorists.
Benefits of home content insurance
Following are the benefits you can avail:
- Following an incident you receive value for rebuilding or repairing your home.
- Claims put forth by domestic help or any third party for injury or loss suffered by them will be covered.
- Additional coverage is offered for damage done to your goods while shifting to a new place.
- Expenses for alternative accommodation will be covered in the event of an incident in your home.
- All valuable will be covered even if they are outside the home.
- You get cover for loss of rent.
- If your items are damaged due to an incident, it can be replaced by items based on the value you had purchased it for as opposed to the current market value.
Exclusions to home content insurance
Following are the exclusions to home content insurance:
- Deliberate loss or damage will not be covered.
- Damage or loss caused due to criminal action will not be covered.
Always read the fine print as there will be lesser known benefits offered by the issuers. Ensure that you are making the most of your investment and that you are saving money.
Home content insurance can be tailored to meet your specific requirements. You must make sure that you need to update the possessions inventory when you add a new possession. You must check if your home content insurance package covers for the business equipment’s kept at home, freezer content, cash kept at home, single item limit on precious belongings, home emergency coverage, etc. You have to understand if the policy will cover the repair or replacement cost of the lost or damaged item according to the current market value or according to the value it was acquired for. If you travel a lot, you need check if there is any terms set for how long the property can be left unoccupied and if the items will still be protected in that case.
Meet with an insurance representative and choose a suitable plan that will meet all your requirements. You can compare it with the insurance offered by others as well. You will be surprised to know a small amount you pay towards the insurance each month will protect your contents and personal belongings for long.