In light of recent events, including the New Year’s Eve fire at the Address Hotel in Downtown Dubai, we have received a surge in enquiries for home insurance. From precious family heirlooms to custom electronics, ServiceMarket customers seek the peace of mind that comes with knowing their homes are protected if the unthinkable happens. In that spirit, we have put together a guide to home insurance to help you navigate different products, providers, and prices. The good news is, there is a surprisingly affordable home insurance product for every household in the UAE.
- Navigating home insurance
Are you a renter? If you rent your home, you need home contents and personal possessions insurance. Home contents insurance covers things that remain in the home, such as appliances, furniture, and fine art. Personal possessions insurance, on the other hand, covers valuables carried outside the home, such as electronics and jewelry. This insurance will repair or replace your items following damage from fire, flooding, theft or vandalism. Home contents and personal possessions insurance are typically sold to renters; however, it is your landlord’s responsibility to have an active building insurance policy on the apartment or villa itself.
Are you a homeowner or landlord? If you own your home, your first priority should be building insurance. Building insurance covers the structure of your home (walls, roof, windows, etc.) if it is damaged by fire, flooding, natural disasters, theft, or vandalism. It also covers lost rent, lock replacement, injury to family members inside the home, and tenant liability (if you are a landlord). If you own an apartment within a tower, you can purchase a building insurance policy specific to your unit, while the exterior of the building is usually covered by a separate commercial policy. For single-family villas, the building insurance policy covers both interior and exterior of the home. You should also add the home contents and personal possessions coverage described above to fully protect your home and everything inside it.
- Budgeting for home insurance
Annual premiums for home contents and personal possessions insurance are roughly 0.5% of the total coverage value. For example, an average policy for a rented 2-bedroom apartment will cost AED ~1,000/year for AED 200,000 of coverage. You will need to know a rough estimate of the value of your possessions and contents before you request a quote.
Annual premiums for building insurance for single-family homes are as low as 0.1% of the rebuild value of the home. Compared to car insurance, which ranges from 2-5% of the car value, building insurance is exceptionally cost effective. Building insurance is priced according to the age and rebuild value of the property, as well as its history of damage and the riskiness of its location. Higher risk locations include land reclaimed from the sea, such as the Palm Jumeirah.
Illustrative annual premiums for home insurance in Dubai
|Apartments||1||Bur Dubai||150,000||Contents, possessions||800-1,200|
|Apartments||2||Dubai Marina||200,000||Contents, possessions||950-1,350|
|Apartments||2||Jumeirah Village Tri.||4,000,000||Building, contents||3,000-5,000|
|Apartments||5+||Jumeirah Islands||10,000,000||Building, contents, possessions||9,000-12,000|
- Buying home insurance
There are around 50 licensed insurance companies in the UAE and many of them offer home insurance to individuals. However, not all home insurance policies are created equal. Make sure you read the detailed policy wording before you sign up to ensure you know what you are buying. For example, check the maximum benefit for nights in a hotel (alternate accommodation) if your home is unlivable. Also, ask about the required documents to file a claim because some companies require proof of purchase for high-value items like jewelry.
Thinking about taking out a home insurance policy? We can help. ServiceMarket has partnered with leading regional and international insurance companies in the UAE to provide the right product for you, whether you rent a studio in Dubai or own a five-bedroom villa in Abu Dhabi. So give us a call or click here to get started.