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Many UAE residents still overlook the need for home insurance when buying or renting a property in any emirates. But experts caution that not having home insurance is a bigger than usual risk these days.

The primary reason still being when replacing all your belongings in case of a catastrophe can easily run into the tens of thousands of dirhams, as opposed to when paying a nominal amount each month. Having an apt home insurance policy can steer you away from irreversible damages to your financial health.

What is Home Insurance and how is it useful?

Home insurance is a shield that helps the policyholder from the replacement cost associated with his/her belongings in the case of a catastrophe. These replacements can usually amount to thousands of dirhams and for an expatriate community that is a big financial blow.

Many UAE residents do not consider it vital to purchase home insurance. But the latest accident in Beirut, Lebanon has changed perceptions for many.

A single incident (man-made or natural catastrophe) can impact the financial stability of a family irrespective of his/her financial class. The right home insurance policy will protect the policy owner from such a hardship.

Home insurance (also known as homeowner’s insurance) covers losses and damages to a person’s house. The insurance coverage can be extended to cover loss or damages to personal assets, belongings, and or structural damages to buildings due to natural causes such as fire, water, and so on.

Since UAE has a large expatriate population (85 percentage population) health insurance is an important instrument that protects families from expenses caused by uncertain events like fire, waterlogging, theft, and so on. When expatriates travel to their home country for more than a month or so it is very common that apartments might have water logging problems. These problems can further escalate to structural damages causing a huge financial burden to the resident. In the case of a highrise apartment, the structural damage can affect other tenants as well.

Hence, it is important to look into the right homeowner’s insurance to serve the purpose of prospective buyers. Depending on the home insurance the policyholder chooses he/she can avail reimbursement or replacements of expensive furniture, electronics, and whitegoods as per the plans cover. These benefits can certainly make home insurance an appealing buy.

Is it mandatory for homeowners to have home insurance?

Homeowners are technically obliged to take home insurance if the home is under the mortgage. Such insurances usually cover the structural damages not the property inside the house. To cover the expensive property inside the house, the tenants are required to buy insurance that suits their requirements.

Things to Note while buying a home insurance 

There are multiple things to consider while looking for the right home insurance policy that suits each individual's requirements, some of them are as follows:

The Value of property that you wish to cover 

Before looking at the various home insurance options available in the market it is important that he/she takes stock on the value of the property to be insured. If the insurance plan cover is less than the value of the product undercover look for a better option that covers the value of the entire possession.

Look into the intricacies of the policies 

It is important as an insurance buyer he/she looks into the intricacies of each policy document. It is important to understand what types of damages each policy cover and the items that come under such policy plans. Choose the policy that meets all your requirements, written clearly on the policy. If the policy mentions all household goods then it is necessary to look into the specifics as some insurance policies do not consider electrical items as household goods. Do not run by assumptions and perceptions, make sure all that is promised is mentioned in the policy document. It is also important to understand non-claim scenarios. The factors that might result in non-claim scenarios or the claim getting rejected or denied. Negligence and false claims are some of the most common reasons associated with claim denial and rejections. The policy that you wish to buy will have all these terms and conditions clearly stated and it is the duty of the client to fully evaluate the policy before purchasing the same.

The home insurance premium and the premium coverage amount 

The insurance companies have multiple home insurance products offered at different rates. The affordability factors associated with insurance premium plays an important factor in deciding the purchase of an insurance policy. The premium coverage amount is another factor that determines the purchase of an insurance policy by the prospective property owner. Higher and wider the coverage scope the better the policy. A policy that provides excellent coverage with a wider scope offered at the right price is your ideal policy.

Products bought after insurance covered 

In most cases, the products bought before and after signing the insurance is covered by the insurance policy as long as it is within the agreed insurance amount limit. It is important to discuss the same with the insurance company or the agent before signing the policy paper. If the new item exceeds the agreed-upon insured amount then it is important to buy new insurance to cover the excess amount. Some insurance policy providers require the policyholders to notify the insurance providers of any significant purchase. These might incur additional charges, in the case of low-cost items it might get automatically included in the policy cover. Do make it a point to read through the offer document before committing to any plan.