In­sur­ance essen­tials that home­own­ers in the UAE must be fa­mil­iar with

The National - News - - BUSINESS MONEY&MARKETS - DAVID HAR­RIS David Har­ris is the di­rec­tor of distri­bu­tion for in­surer RSA in the UAE and Bahrain

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.

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