According to a study conducted by Souqalmal.com in 2015, 86% of the UAE population do not have home contents insurance have contents insurance and 45% of them responded saying that home insurance was never a priority for them. The reason behind this is that they don't feel the rick of fire, loss, theft, earthquakes, floods or other natural catastrophes.
There are different kinds of home insurance to choose from that helps one cope up with unavoidable circumstances. Here is Luxhabitat's guide to help you insure your home in collaboration with FISCO.
What does a home insurance policy cover?
Building Cover: This covers the building structure or physical premises such as apartment, villa.
Home contents cover: This covers the contents of your home.
Personal belongings cover: This covers your personal belongings and valuables.
How does a home insurance work
An important aspect of home insurance that you as a buyer have to keep is mind is that a cover is provided only if you do not leave your home empty for more than 60 days.
If you are staying in a rented apartment or villa, you can either choose to insure the contents of your home as well as your personal belongings or just the contents. On the other hand, if the apartment or villa where you are staying is owned by you, you either insure just the building value, or the building value along with the contents or the building value, the contents as well as your personal belongings.
For both tenant and owner, the insurance covers a standard limit for Third Party Liability approx. AED 2,000,000 and Tenants Liability approx. AED 1,000,000. This varies from company to company and if you would like to increase the limit an additional premium would be incurred. Apart from this, you can enjoy additional benefits such as Replacement locks and keys, Domestic Staff cover and more.
A building should be insured for the amount of their current replacement value. This is usually obtained upon purchase of the property. However, please note that this figure fluctuates based on market inflation.
Contents must be insured on the total current replacement cost of all items. These items could include, but not limited to, carpets, curtains, furniture, electrical appliances, valuables, and clothing. Items above AED 40,000 must be declared separately (this varies company to company).
Personal belongings are covered wherever you travel across the world. These items could include, but not limited to, watches, sunglasses, phones, wallets, and handbags. Accidental loss and damage are covered under this. Items above AED 10,000 must be declared separately (this varies company to company).
buying a home insurance policy and its premium
There are around 50 licensed insurance companies in the UAE, however only few insurance companies provide home insurance to individuals such as RSA, AXA, Adnic, Union, Qatar and Oman Insurance. As all home insurances are not created equally, it is important for you to read the policy in details before signing so that you are aware of what you are paying for. The premium varies between different insurers and the benefits they provide varies along with it hence it is recommended that you consult an insurance broker in order to be able to choose the right product.
An approximate premium/ rough calculation would be: Building Value (for owners): 0.05% of the sum insured Contents : 0.3% - 0.4% of the sum insured Personal Belongings : 0.8-1.0% of the sum insured.
In case of a claim, an excess amount is charged in order to avoid minor claims. You as a buyer must ensure that you read the amount of excess charged and whether all your terms are met before going ahead with the policy.