Moving to Dubai: Sorting out your home insurance

Make sure your belongings are covered

Moving to Dubai: Sorting out your home insurance

Moving to Dubai means there are many things to take care of, especially when that comes to where you're going to live.

Whether you're renting in Dubai (and if you're renting, click here for our full guide) or buying then you'll need insurance.

Do you know how much your laptop is worth? How about that pair of earrings your granny left you? Surprising as it may seem, insurance is frequently neglected in Dubai.

It’s not expensive compared to the cost of refurnishing your entire home if worst comes to worst, and it means you can relax in the knowledge that your Dubai property is fully protected.

You also need to evaluate your belongings accurately – they might be worth more than you think. And when most contents insurance costs less that Dhs500 a year, it’s not worth taking a risk.

The good news for Dubai rental tenants is that their home is likely to be insured by the landlord, but be warned – that policy probably only covers the physical aspects of the apartment or villa (for example, damage to the building itself). It won’t cover your belongings, so it’s important to take out your own additional coverage for maximum protection.

It might come as a surprise, but a 2018 survey by Yallacompare revealed that nearly 70 percent of UAE residents don’t have home contents insurance, with many saying they’re willing to “take a chance” rather than insure their home.

And this is despite the fact that 84.5 percent of UAE residents admit in the survey that they would feel more comfortable in the knowledge that their belongings are covered by home insurance when they travel.

“The home insurance market in the UAE is relatively small when compared to the country’s entire insurance market,” says Jonathan Rawling, chief financial officer of Yallacompare.

“A survey we conducted found that 69.1 per cent of UAE residents are not covered by home insurance. We suspect that the ‘real’ number of those not covered is higher – there are a number of misconceptions around what is covered.

“According to our survey, 35 per cent of respondents said that they don’t see the point in home insurance at all – so there’s certainly an element of UAE residents not seeing the benefits that a home insurance policy would offer.”

There are three main types of policy, apartment block, building and home contents insurance. The latter is the one that should be taken out by the tenant to cover against fire, theft and damage.

Under home contents policies, tenants generally also benefit from alternative accommodation cover (payment for somewhere else to live if the rented
property becomes uninhabitable) and cover to protect against liability to the landlord for any damage.

Meanwhile a dubizzle Property poll stated that more than 93 percent of the 1,458 people it surveyed are not interested in purchasing home insurance, while only 30 percent knew what it covers. And almost a quarter of people (24 percent), including both tenants and landlords, believe insurance is the landlord’s responsibility.

“It is important for those moving home to consider what’s next when they find their ideal property in case any complications arise – whether an unexpected leak damages their new TV or they lose a valuable possession while exploring the area. Home insurance should be considered as the next step in the home-seeking journey in the UAE as it can protect residents from potential losses in the future,” said Matthew Gregory, Director of Sales, dubizzle Property.

Nineteen percent stated that home insurance is “too expensive”, while other factors include not seeing the benefit of owning it (17 percent), not knowing how to buy it (nine percent) and not trusting insurance companies (eight percent).

“The region’s low penetration of home insurance is largely a result of lack of awareness coupled with misconceptions around affordability and coverage policies. As such, clarifying what home and home content insurance are and what they cover is an essential first step. Affordability should also not be a concern, as home insurance can cost as low as Dhs21 per month. While people in the region generally adopt an ‘it won’t happen to me mentality’, they are exposing themselves to larger potential damages as opposed to taking pre-emptive measures,” commented David Harris, Director of Distribution at RSA Insurance.

Despite the UAE being a safe country to live in, it’s still not worth taking and risks when it comes to your stuff.

Decided on the area you want to live in and the price you want to pay? There’s no time like the present to start negotiations.

For your essential to moving to Dubai and living in Dubai, click here.

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