After buying a house in the UAE, the next step is protecting your investment with home insurance
20 November 2019| Last updated on 23 January 2020
Residents in the UAE have a steady appetite for investing in their own property in the country.
With the lower buying prices, retirement visa where expats can extend their stay in the UAE by five years, and a wide selection of residential districts that can meet any lifestyle, it's no wonder why six in every 10 UAE expats hope to invest in a home in the Emirates.
Despite these growing aspirations for homeownership in the Emirates, the number of UAE residents who subscribe to a home insurance policy is very low.
With its low penetration rate among expats, it begs the question on what is home insurance and do you need home insurance in the UAE?. Home insurance protects homeowners in the UAE by covering losses and damages to their house and their assets, caused by unpredicted events such as theft, fire, vandalism, water damages from leaks, lightning, etc. It ensures that your hard-earned property and household belongings will not cost you should an unpleasant incident take place.
Being aware of home insurance, what it can cover, and the right kind to match your budget and needs is key to securing your home from any unforeseen threats.
Here's what you should know about choosing home insurance in UAE.
Know the types of insurance available
The UAE has three types of home insurance available. Find the one that best suits your needs below:
1. Building insurance
Home building insurance covers the structure of your property - the walls, pillars, doors, windows, roof, etc. This type of policy protects you financially by minimising the costs of replacement and living expenses if anything were to happen that may damage your apartment or home.
Building insurance in the UAE will typically cover but is not limited to...
- Fire or water (rain, flooding, leaks) damages
- Loss or damages from theft or vandalism to your home
- The cost of alternative accommodation should your home become unfit for living after the incident
- Lost keys and damaged locks replacements
- Unused/lost rent should the home become unfit for living after the incident
2. Home contents insurance
Home contents insurance takes the financial burdern of any stolen or damaged household items within your house.
This type of home insurance in the UAE will include, but is not limited to, home appliances, furniture, electronics, fine art, etc.
3. Personal belongings insurance
Suited for both homeowners and renters, personal belongings insurance covers the placements of your personal items that you carry or wear with you when you're outside of your home.
This includes, but is not limited to musical instruments, electronics, jewelry, etc. that were stolen or damaged.
Be aware of what is covered
Before signing on for any UAE home insurance policy, it's recommended to check and be thorough on what exactly your insurance will cover. Two different home policies will be covering your "property", but might just be limited to the structure of your home and it's not the swimming pool or garden that is still within your property's premises.
Moreover, here are some less-obvious things you may want to know if it's covered by the insurance policy.
- Freezer contents - if the policy will cover food that may become spoiled after an electric issue
- Emergency services - if the policy will cover the costs of emergency help or needing assistance to break into your home in case of an emergency
- Garden features - if the policy will cover any loss or damages to your garden, especially if you're planning on doing any projects to your garden space
- Home emergency - if the policy will cover your alternative accommodation fees in case your house is deemed unfit or unsafe for living
Home insurance in the UAE is affordable
One of the reasons homeowning expats don't have protection is because they believe home insurance is expensive in the country. Contrary to popular belief, UAE home insurance is fairly affordable. Some start at AED 21 a month, of which the rate increases as per the combined value of your home.
Beware of the upselling brokers
When you're taking out a mortgage from a bank or you're investing in property from a real estate agent, they might encourage you to purchase home insurance that is tied in with the mortgage or the property investment. Careful research with UAE insurance companies may help you determine if the bank's/broker's home insurance policy might have you paying more than you should.
It's worth taking the time to look for the best value home insurance policy that suits your needs and budget.
Have an up to date valuation on the value of your home
Try to avoid underestimating or overestimating the real value of your property and your household contents, or you might find yourself paying too little or too much for your UAE home insurance. As good as it may sound to pay less for your home insurance policy, it could mean that some incidents or some home items will not be covered under your insurance.
To skip on unnecessary spending or future disappointment on what your insurance can't cover, it's important to have an up to date valuation of your home and household possessions so that you can have everything covered.
It's recommended you take pictures of your household items and where they are placed beforehand, as well as keeping receipts of valuables, so that in the event of an insurance claim, you'll be able to provide proof.
Keep a lookout for annual increases
Some UAE home insurance policies may increase annually - keep an eye on any increase in rate and ask your insurance provider for more details regarding it.