Whether you are renting a property in Dubai or have invested in a home of your own, one essential investment that you have to make is to secure home insurance.
Although Dubai prides itself on being one of the safest places to live in the world, that does not discount the possibility of fires, earthquakes, floods, and other unforeseen disasters that can put your personal belongings at risk.
For some people, home insurance may seem like something that is nice to have. But when you factor in the costs and hassles associated with the effects of fires and natural disasters, the cost of an insurance policy pales in comparison.
Erring on the Side of Caution
If you live in an apartment, the building owner or developer has to secure building insurance. Ditto, if you are buying a villa or home in Dubai: you will need to purchase building insurance.
However, it is essential to note that, more often than not, building insurance is insufficient. This is because this type of insurance covers the physical structure only, whether it is a home or a building. It does not cover the personal belongings of the inhabitants that can be lost or destroyed in the event of a disaster or calamity.
In the United Arab Emirates, building insurance is mandatory. Most banks also expect you to secure this type of insurance if you are getting a mortgage to purchase a home.
Although mandatory, building insurance coverage is not comprehensive. Fires, natural disasters, and even burglary are difficult to predict but can affect almost everyone, necessitating the need to secure a home contents insurance.
This policy covers everything inside the home, from furniture to gadgets, and jewelry to other prized belongings.
If you are a tenant or landlord, a home contents policy will give you protection from accidental damage as well as third party liability up to a certain degree.
Shopping for an Insurance Policy
Now that you have understood the value of having home insurance, you might be on the lookout for the best insurance deals. Here are a few essential tips that will help you find the right insurance policy for your property.
Know what you are buying
Broadly speaking, there are three types of insurance available for you to choose from.
First, you have building insurance. This type of insurance covers the structure of a property. The primary purpose of building insurance is to help with the cost of replacing different parts of the home in case these become damaged.
Typically, building insurance covers fire and water damage, damage or losses due to theft or vandalism, unused or lost rent in case the property becomes uninhabitable due to an incident, and the cost of having to avail of different accommodation.
Second, you have home contents insurance. This type of coverage serves as a cushion should your household items become damaged or stolen. Typically, home contents insurance covers furniture, appliances and other electronics, and fine art pieces.
Third, you have personal belongings insurance. This type of insurance covers personal items that can be carried or worn outside the house. These include jewelry, electronics, and musical instruments.
Get an accurate valuation of the property
Another critical task that you need to undertake before securing an insurance policy is to get a precise appraisal of your property.
If you overvalue your property, you will pay a higher monthly premium. And on the other side of the coin, if you undervalue your property, you will not get a compensation equivalent to the actual value of your property should anything untoward happen.
If you are getting building insurance, you should not include the price of the land in the valuation. This will only lead to the overvaluation of your property.
Check every detail of the policy
When you are reviewing each policy on your shortlist, you need to make sure that you pay attention to each detail included, especially the fine print.
Be aware of the definition of terms, and if you are unsure about something, do not hesitate to ask.
Know what’s covered in the insurance policy as insurance companies may define the same terms differently.
Peace of mind is Priceless
One reason why only a small number of UAE residents secure a home insurance policy is they think that this type of insurance is costly.
On the contrary,home insurance in the country is affordable. Plus, you can’t put a price tag on peace of mind and security, especially if you frequently travel or if you have made a substantial financial decision in the form of buying a property.
But do be aware that some insurance policies increase annually. Factor this in your decision making process.
If you don’t have a lot of time on your hands, you can make your search for a home insurance policy easier by checking out comparison websites. These websites allow you to compare competing policies based on the criteria that you set. Once done, be sure to avail of home insurance for your peace of mind.
Erin Daniyel is the VP for Revenue Operations at Rubicon Project and spokesperson for CompareDubai, an online comparison portal which provides customers with a one-stop platform to compare insurance quotes offered within the UAE. CompareDubai delivers quotations from a number of insurance providers covering a range of products, from Car Insurance to Motorbike, Yacht and Boat, Medical, Life, Business and Home Insurance.