Home insurance is often overlooked, say experts

Home contents insurance is one of the most important types of insurance, but it is often thought of only after an incident occurs.

In the context of the UAE, it is generally thought to be related to fire damages, but it also covers theft, damage caused by rain, and others.

"The unexpected loss of your belongings or home through situations such as these can be devastating. Contents insurance can cover everything from replacing furniture and clothes lost in a fire to replacing stolen valuables and providing financial assistance for temporary accommodation should your home be inaccessible," said Bassam Abid Chilmeran, CEO of Al Wathba Insurance Company.

Julien Audrerie, head of consumer lines at Oman Insurance Co, believes that following the fires witnessed at the Torch Tower, The Address and, most recently, with the Al Nahda building incident, insuring one's home and its contents is as important as insuring life, health or car.

Hitesh Motwani, chief marketing officer at insurancemarket.ae, highly recommends home contents insurance to secure key assets and because of its low cost.

Franck Heimburger, chief personal lines officer at AXA Gulf, agrees that home insurance is a relatively inexpensive product, considering the coverage it offers.

"Although people often relate home insurance to protection against theft or similar instances, there are other covers which are incredibly useful to an owner or tenant. If you consider the severe rain that we experienced in the UAE earlier in the year and the tower fires that occur in the summer period time and again, people often end up with damaged contents in their homes or buildings and even left without anywhere to stay due to these incidents," said Heimburger.

In rare instances, according to Heimburger, there were some AC leaks that have caused thousands of dirhams in damages in the past years.

"Home and personal belongings insurance is an extremely affordable way to protect your furniture, art, jewellery and the like. We strongly advise individuals to consider it as it can save you thousands in the case of accidental damage, theft or loss."

Read the fine print

It's important to check that all the covers are included. However, there are a few key ones - like fire damage, water damage, accidental damage, liability to both the landlord's property (if you're a tenant) and also to the public, as well as an alternative accommodation.

Usually, a contents insurance policy provides cover for the items available at home - furniture, garden decoration, and stuff in the storage room outside the house but within the limits of premises.

UAE residents should also check that they have the correct amount of cover for the household they're insuring.

There's no reason to accept lower limits on the policy if people, for example, are living in a large villa. A more comprehensive cover includes loss of rent or alternative accommodation and personal legal liability.

In essence, insurers say, people can cover almost everything at home.

Cost and what it covers

According to the UAE insurers, premiums vary depending on the level of cover required. Some firms offer as little as Dh400 plus VAT a year, which is a little over than Dh1 a day. With this premium value, buyers can get coverage of up to Dh100,000 for their household items.

Typically, for a 2BHK apartment, the annual premium ranges from Dh600 to Dh800 for average total content value of Dh75,000. If there are some other expensive assets like a Rolex or a Cartier to be insured under personal belongings, then the premium varies accordingly.

Some of the coverages also include home assistance service that provides customers with support should they find themselves in an emergency situation that needs immediate fixing, such as a leak or a broken window.

In addition, some companies have launched a service that offers initial advice from an authorised local law firm for all labour and rent disputes as well.

Products purchased later

Generally, this insurance is based on the overall estimated value of the contents of people's home rather than individual items. If someone purchases new products and the value of the contents still sits within the value they have insured, then they do not need to pay for additional insurance, say insurers.

But some insurers demand that if the total purchased items value exceeds 10 per cent of the total sum insured, then the insured needs to inform the insurer to make sure that these items are included in the cover. This may include additional charges. For lesser value items, they are automatically included in the cover.

However, it's worth noting that if someone buys an expensive item that needs to be individually covered - for example, an engagement ring - then, insurers say, one may have to pay extra if he or she goes beyond the fixed amount of coverage.