Insurance essentials that homeowners in the UAE must be familiar with
Have you had enough of renting and prefer to put your money towards investing in your own property in the UAE? About six in 10 UAE residents plan to invest in property in the UAE or overseas in the next 12 months, according to a YouGov poll from property investment company IP Global last month.
This appetite for home ownership in the UAE, however, is not always matched by an awareness of the insurance cover you need to protect your new asset. Here’s what you should know.
Protect the structure of your home
The decision to buy a home is often connected to other major life decisions such as getting married or having children. It’s no surprise then that homeowners prefer to avoid any “unnecessary” costs, such as home contents insurance, as it is considered a “nice-to-have” rather than a “must-have”.
For starters, building insurance is essential. For villas, this is the responsibility of the owner, but for apartment blocks, it is the responsibility of the building owners’ association or the managing developer of the tower.
Remember, building insurance only covers the physical structure and should not be confused with individual contents insurance. Apartment owners and tenants need their own policies to cover personal belongings.
Buyers should ask basic questions before committing. This includes an overview of the property history as well as a check of the plumbing and electrical systems.
If you require a mortgage to finance your purchase, the bank expects you to have buildings insurance and life insurance in place. While buildings insurance is mandatory in the UAE, home contents cover is not.
Remember what a home contents policy covers
Anything fixed inside the house such as furniture.
Personal possessions we take outside the home, such as mobile phones, watches, jewellery, or even your golf clubs. This covers you against fire, explosions, lightning, earthquakes and other unexpected events.
Liability for both tenants and landlords. This can include accidental damage caused by a toddler drawing on a TV or sofa. It also covers liability towards any third party for accidents up to a certain limit.
How much it costs
Contrary to popular belief, home insurance is affordable, starting at Dh21 a month - less than Dh1 per day. If you own a two-bedroom apartment worth Dh1.1 million with insured home contents and personal belongings amounting to Dh175,000, the estimated annual insurance premium would be around Dh1,445.85.
This represents 0.1 per cent of the combined value of your home, contents and personal belongings. For renters with the same contents, the premium would be Dh992.25.
Numerous insurance portals exist that compare options available on the market. Fill out information about your home and contents to generate a quote; for more detailed cover, seek the advice of an insurance broker.
Making a claim
To make a claim, you must prove your loss. Take plenty of photographs of the contents you want insured. Receipts of your purchases will also come in handy, so keep them in a safe place. If you don’t have receipts, insurers will still pay out using photographs or any other proof a customer submits.