A GUIDE TO HOME INSURANCE IN DUBAI

Home insurance is associated with theft - but this is not an issue in Dubai due to low crime rates. A likelier threat is the risk of fire and flooding caused by leakages. Compared with other regions, homes in the UAE have a shorter life span because of:-

1) Risky materials - Dubai’s apartment buildings are built using aluminum panels with flammable material at its core. This type of façade is high-risk and replacing it is expensive.

2) Harsh weather - In Western markets it is common to find homes that are a hundred years old. But the climate in the UAE is harsh and reduces the life expectancy of a building. This weakens the structure and ups the risk of accidents.

Types of Property Insurance

Keeping the above in mind, it’s wise to have a property insurance policy that covers the following components:

1. Building insurance

Building insurance is for the physical structure - walls, roof, doors, windows, flooring etc. It covers the following risks:

- Damages from fire, flooding or other natural calamities

- Damages from theft and vandalism, or other man-made disasters

- Injury to yourself or your family 

- Occupier/tenant liability

- Replacement of locks and keys

Premiums are estimated according to the age and history of the property, as well as its location. Higher risk locations, such as land reclaimed from the sea, have higher insurance premiums.

 

2. Home content insurance

Home content insurance covers movable property that is used in the home, including furniture, appliances and décor. This is used for the following risks:

- Damages from fire, flooding or other natural calamities

- Damages from theft and vandalism, or other man-made disasters

- Loss of major documents including passport, driving license, work permit and residence permit

Always keep receipts of home contents that are worth AED 3000 or more – high-value contents require the buyer to show proof of purchase at the time of appraisal.

3. Personal belongings insurance

Personal belongings insurance replaces valuables in case of loss or damage in or out of the home. Personal belongings refer to anything that can be carried or worn by the person – jewelry, laptops, clothing etc.

How much will it cost?

As an example, the table below shows the estimated costs of insuring a villa worth AED 2,500,000 with contents plus personal belongings.

	Average rate (% of total value)	Total value	Total yearly premium
Building	<0.1%	AED 2,500,000	AED 2500
Home contents	<0.5%	AED 50,000	AED 500
Personal belongings	<0.5%	AED 50,000	AED 500

Source: MoveSouq. Figures given are estimates based on a range of quotes.

Actual rates may vary depending on the level of coverage and value of goods. But, in general, home insurance premiums in Dubai are very affordable. 

A property is an investment, and like any smart person, you need to protect that investment. Get it insured by a reliable insurance company in the UAE. 

Summary: A quick guide for prospective buyers summarizing 1) the need for home insurance 2) the types of home insurance and 3) the estimated cost of home insurance in Dubai.