Property Insurance in Dubai

• Who Is Obligated to Get Property Insurance in Dubai?
• What Does House Insurance in Dubai Cover?
• Dubai Home Insurance Companies
• Best Home Insurance in Dubai: Tariffs and Pricing
• Important Subtleties of Home Insurance in the UAE

Who Is Obligated to Get Property Insurance in Dubai?

UAE laws mandate developers and owners of multi-storey buildings to ensure comprehensive insurance coverage against significant risks. As a result, all dwellings within both low-rise and high-rise residential complexes are insured at the point of purchase and maintain continuous insurance coverage thereafter. 

In the case of private villas and townhouses, insurance is voluntary. Nevertheless, if the scenario involves purchasing a house with a mortgage or if the owner intends to mortgage their property, banks will stipulate that the property must be insured. 

What Does House Insurance in Dubai Cover? 

The scope of coverage for house insurance in the UAE includes:

• Fire
  Reimbursement for restoration or repair expenses of the building.
  Potential costs of evacuation, temporary accommodation in a hotel or rented housing, and other supplementary expenses.
• Natural disasters
  Compensation for damages arising from floods, hurricanes, earthquakes, sandstorms, and other natural catastrophes.
• Vandalism
  Coverage for expenses in case the building or its components sustain damage due to vandalism, burglary, or acts of hooliganism.

Furthermore, the landlord will receive compensation for the rent amount in circumstances where the tenant is compelled to vacate their residence due to damages sustained by the building.

It's important to distinguish that building insurance does not encompass residence and home contents insurance. Building insurance pertains to damages affecting load-bearing structures, walls, roofs, communal spaces, shared items, and mechanisms (e.g., lobbies, halls, elevators), along with the entrance doors and window units of the building. On the other hand, home contents, including furniture, household appliances, electronics, and personal possessions, require separate insurance coverage. 

Additionally, it's important to bear in mind that the majority of insurance funds are directed to the building owner rather than individual homeowners. Homeowners are typically compensated solely for the particular damages incurred by the incident within their living spaces.

Therefore, it is advisable to obtain separate insurance coverage tailored to your unit. We strongly recommend pursuing this option. This way, in the event of a localised fire, unintentional flooding caused by the homeowner or tenant, or vandalism associated with a break-in, the insurance company will assume responsibility for covering the expenses related to addressing the aftermath.

Dubai Home Insurance Companies 

To conduct operations within the UAE, insurance companies are required to obtain a license. There are approximately 50 licensed insurers in Dubai. This roster comprises major international conglomerates including AXA Group, AIG, HSBC, and MetLife, alongside local entities like Emirates Retakaful Limited Careers, Orient Insurance, Nexus Insurance Brokers, and more.

Best Home Insurance in Dubai: Tariffs and Pricing

You can pre-estimate the amount of your annual premium using the following formulas: 

• 0.1% of the sum insured per year — for building insurance in Dubai.
• 0.5% of the sum insured per year — for home contents insurance in Dubai. 

Note: For dwellings located near the Persian Gulf or on one of the artificial islands there, insurance plans are more expensive since these areas have a higher risk of natural disasters. 

An insurance policy for a small studio outside of pricey areas can cost 350-450 AED ($95-122) per year and the sum insured will be up to 100,000 AED ($27.2 thousand).

Important Subtleties of Home Insurance in the UAE

• The insurance amount specified in the contract must be greater than or equal to the value of the real estate object and/or the contents inside.
• When reading the insurance policy, you should pay attention to the list of documents that you will be required to provide upon the occurrence of an insured event, as well as the conditions under which the company makes payments. 
• Also, bear in mind that insurance companies normally do not compensate for damage if no one has been occupying the housing for more than 60 consecutive days. 
• It is advisable to clarify in advance the stages involved for the complaint review procedure in case of its occurrence, as well as to study the list of accompanying documents that will be required.
• For tenants who rent a flat or a house with furniture and appliances, it is important to check with the owner whether these items are insured. If they're not, it's highly recommended to obtain insurance coverage. Failing to do so might result in a situation where, in the event of an incident, you, the tenant, could be held responsible for covering the expense of lost or damaged property items to the owner. 
• Companies frequently extend special offers to new customers, presenting highly advantageous opportunities. For instance, they might propose insuring both your home contents and possessions you take with you on vacation. Consequently, if an insured individual's laptop is stolen while travelling, they could qualify for compensation—provided they promptly report the incident to the police and subsequently provide the insurance company with evidence of exhaustive search efforts.

In a Nutshell 

Prior to establishing any engagement with an insurance company, it's imperative to thoroughly review the insurance documents and seek out the most favourable offer currently accessible. Additionally, it's crucial to bear in mind that building insurance will not encompass damage confined solely to your specific unit. However, procuring individual insurance coverage for your premises ensures that you will be eligible for compensation should such an insured event occur.

Cover photo: Sreehari Devadas (Unsplash)