A guide to selecting the right home insurance in the UAE
Imagine going on vacation and coming back to find your house wrecked by water damage or something worse, like a fire – all your valuable items worth thousands of dirhams, destroyed – a nightmare which could become reality at any time if you happen to be unlucky. Many residents overlook the need for home insurance when buying or renting property in Dubai, or any other emirate, but not having home insurance is a big risk, as replacing all your belongings in case of catastrophe can easily run into the tens of thousands of dirhams. At Bayut, we want you to be covered in the event of a home-related disaster, so here’s a comprehensive guide on how to select home insurance in the UAE.
what is Home insurance?
Before going into the specifics, let’s take a look at what it actually means to obtain home insurance in the UAE. Home insurance, aka homeowner’s insurance, is a form of property insurance that covers losses and damages to a person’s house. Home insurance coverage can extend to buildings, houses, individual contents or personal belongings in the home. Interior and exterior damage to the building’s structure, and loss or damage to personal assets or belongings in the home due to fire, water or natural calamity, are some of the incidents that are covered by home insurance.
importance of home insurance in the UAE
Although the UAE is considered to be a safe place that isn’t prone to fire, theft, earthquakes or floods – it does happen. There have been highly publicised fires at The Address Downtown one New Year’s Eve, and Dubai Marina’s 86-storey Torch Tower. While these events are, thankfully, unusual, it is best to make sure you are protected, particularly if you are in an apartment building where a fire, 20 or more floors away from your property could still affect your belongings. We are also entering the time of year when many expats leave their homes unattended for an extended period, the summer, which opens up the possibility of homes sustaining water damage (such as leaking pipes causing flooding), which can lead to significant loss and damage to personal belongings and other valuables, particularly if the flood is not discovered for a period of time. The absence of home insurance results in residents taking up the burden of paying the expenses of rebuilding and replacing damaged items, and even damage to the contents and decor, and, in the worst case scenario, structure, of neighbouring properties.
choosing the right home insurance
Make sure to know tenant responsibilities. There is a general misconception that it is the landlord’s responsibility to have insurance for the property, but this is incorrect. Legally, a landlord is only required to provide home insurance if the house is mortgaged, which will still only cover the physical structure of the house and not the contents of it. Thus, if you want to secure the value of your belongings inside your home, it is advised that you take up home insurance, irrespective of whether you rent or own property in the UAE.
If you are renting an apartment or villa you need home contents cover i.e. insurance which covers the loss or damage of your personal belongings, such as furniture, electronics, jewellery, etc. This insurance will repair or replace your items following damage from fire, flooding, theft or vandalism. Your building’s landlord will most likely have an insurance plan on the apartment or villa itself, but it is tenant’s responsibility to obtain it for their personal belongings if they are held responsible for the damage.
If you own a home, whether it is a villa or apartment, obtaining building insurance should be your first priority – this ensures that the structure of your home will be covered from any sort of damage that is stated in your contact. However, this only covers the physical structure of the house and doesn’t cover the contents of your home. Home contents cover would be added to the coverage of your building insurance.
Understanding your coverage plan
When shopping for home insurance in the UAE, make sure to look for a policy plan that’s right for you. There are around 50 licensed companies in the UAE, that offer great insurance policies for homeowners, however, do not get swept away with fancy sounding promises from insurance brokers. Before choosing any insurance policy make sure to compare every detail of the plan to understand how much of your property and valuables will be covered.
Bear in mind, just as it is with any insurance, you will need to pay a premium (amount to be paid for a contract of insurance), so you need to evaluate which plan works for you at the best price. A standard insurance plan can start as low as AED 200 a year, however, the cost is dependent on how much coverage you need.
The first thing to check before you go ahead and sign the documents of any home insurance plan in the UAE is to evaluate the value that will be covered by the plan. If your house has items worth AED 50,000 and the insurance plan covers less than half of that – it is best to seek other options, as you would be paying a premium for a plan that doesn’t cover the actual value of your belongings.
Insurance plans provide detailed information on what contents are covered, and what type of damage will be covered. It is important to read the fine print to get to know the actualities your plan covers. Providers of home insurance in the UAE will mention things like, “all household goods that are located within your premises will be covered;” in this case is it important to know the plan’s definition of what comes under household goods – there is a possibility that electronics may not be counted as household goods.
You may think that once you’ve signed up for the plan, you will definitely get back your claim in case of any damage or loss, however, there are circumstances in which your claim could be rejected. Negligence and false claims are some of the reasons your claim could be denied. Nevertheless, your policy document will state all the terms and conditions of your policy and it is best to thoroughly evaluate them before making the commitment.
So if you’re still thinking “Do I need home insurance in the UAE?” The answer will always be yes. The world is unpredictable and its best to be prepared for the worst. For more tips, news and property information, make sure to continue reading the UAE’s favourite property blog!
Hi, I was wondering if the insurance policy would cover damages to my villa such as cracks due to temperature variations, water damages etc where in refurbishment or replacement (eg gypsum ceilings or wardrobes and cabinets) is required. Is there a name for such specific coverage?
Hello! Thank you for reaching out to us.
Ideally, damages caused by harsh temperatures and water should be covered under your home insurance plan. However, it’s important to note that every policy is different and the type of damages that are covered for can vary depending on the plan that you’ve signed up for. We would recommend that you check with the insurance provider directly to get the most accurate information about this.
Good luck!