Your Money blog: home contents insurance in the UAE – all you need to know

Home contents insurance can lost as little as Dh200 a year but many UAE residents don't bother to sign up.

It is wrong to assume that everything in your house is covered by default when taking home insurance. Mona Al Marzooqi / The National

Your next holiday could end up costing a lot more than you intend, according to Souqalmal.com. Josiane Assaad from the finance comparison site, says residents without home insurance risk losing a lot of money if something happens to their property when they leave the country for a break. With many UAE residents now preparing for their spring getaways, here Ms Assaad reveals why insurance is useful and what we should keep in mind when buying it:

What can go wrong with our homes while we are away?

Residents are more prone to loss/damage to their houses during the holiday season as they tend to leave their houses unattended for a longer period of time. Among the major causes of damage to property in the UAE are water damage (such as leaking pipes, flooding etc) and fire, which can lead to significant damage to the property and the resident’s personal belongings, thus burdening residents with the cost of replacement in the absence of home insurance.

Whose responsibility is it to take out home insurance?

Tenants mistakenly assume it to be the landlord’s responsibility to insure the property. Legally, your landlord is only required to have home insurance in cases where the property is mortgaged. And even if your landlord does have home insurance in place, this will only cover the physical premises of the property and not the contents of the house. Should there be an unfortunate incident such as fire, flood or theft, your possessions are not protected. That is why having home contents insurance comes in handy and minimises the costs incurred in case of an incident. Fire or flooding often cause so much destruction, they make your house unfit to live in. In difficult times like these, home insurance can be a big relief. Most policies will provide you with the lost rent or cost of alternative accommodation while your house is undergoing repairs.

How much does it cost on average?

A standard policy can start as low as Dh200 a year, however the cost will differ depending on the value of the covered contents and the additional covers that the insured might opt for. One of the biggest misconceptions around home contents insurance is that it is expensive.

How popular is it?

Taking home insurance is not yet a common practice in the UAE; residents tend to overlook this area because it is not compulsory. A 2015 survey from Souqalmal.com showed that 86 per cent of respondents in the UAE did not have home contents insurance; 45 per cent did not consider it a priority; 20 per cent thought it was too expensive and close to a third admitted they were not sure how to buy it.

What do you need to be aware of when signing up for cover?

With many misconceptions and myths circulating around, residents could end up buying the wrong policy. It’s important to fact check these preconceived notions to make the right choice. Insurance providers define contents as household goods and other items such as clothing, valuables, furniture and fixtures, electronics, that are located within your premises. Home contents insurance typically covers you against risks such as fire, lightning, explosions or earthquakes. It will also insure against water leakage, storm or flood damage and covers the cost of replacing your personal possessions such as furniture, clothes, electrical items and so on. However, a standard home contents insurance policy can be customised to include additional cover for personal belongings, accidental damage, domestic help and others for increased protection.

You talk about common misconceptions. What are they?

It is wrong to assume that everything in your house is covered by default. Home insurance policies contain many exclusions and restrictions with respect to coverage. For example, valuable items such as jewellery and art pieces are covered only if you have the personal belonging cover in your policy; this will have a maximum amount that can be claimed in case of loss or damage.

So what comes under personal belonging cover and what doesn’t?

Personal Possessions Cover is an optional cover that you can choose to take with your standard home insurance policy. This extends your coverage beyond the physical premises and contents of your home to also include your possessions that can be carried outside the house. At an additional premium, personal belongings like clothing, watches, bags, personal electronic devices and other valuable items specified while applying for the policy, can be insured against loss, theft or damage. For specific items, you would like to insure under personal possessions - that exceed a certain monetary value as specified by the insurer - you will be required to provide details such as the value and possibly a proof of purchase.

Any tips to avoid invalidating your cover?

There are many circumstances where your claim could be rejected: leaving the house unoccupied for longer than 60 consecutive days (or as stated in the policy); neglecting home maintenance and making a claim caused by such damage; providing false or exaggerated facts while making a claim; not securing the house properly leading to a burglary; not reporting theft to the police ... the list goes on. Your policy document will state the terms as well as exclusions under your policy. We advise policyholders to go through these carefully, to avoid invalidating their cover.

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