UAE residents often tend to overlook the importance of insuring their household contents.
But signing up for 'home content insurance' should be an obvious choice, given the fact that its benefits far outweigh the minimal cost of buying one.
Considering how much you spend on your annual house rent or home loan instalments, and furnishing your home, the very affordable cost of insuring the content in your home is a small price to pay for your peace of mind.
The Souqalmal.com team sums up the what, why and how of home content insurance.
What is home content insurance?
Simply put, ‘Home Content insurance’ pays for the damage or loss of the possessions present in an individual’s home. For example, in case of fire or an Earthquake, Home content insurance will cover the damages to your assets and belongings that were present inside the home, during the accident.
Who’s the right candidate for home contents insurance?
‘Home Contents Insurance’ is a must-have for owner-occupiers and tenants, alike. If you own the house you live in, you need an all-round insurance coverage to protect the physical premises of your home, its contents, as well as your personal belongings.
Tenants need this insurance to protect the things inside the house that aren’t physically attached to the building.
While it is in the best interest of the landlord to insure the structure of the building and therefore his investment in the property, it is the tenant’s responsibility to insure the contents of their home.
Insuring your home is not the same as insuring its contents
This is a common misconception circulating amongst homeowners, especially amongst those who buy a property in the UAE backed by bank finance.
Most banks in the UAE offer property insurance to the borrower at a fixed annual premium of 0.04-0.06 percent of the property value. This usually comes as a standard feature with most home finance products.
However, borrowers who intend to occupy the house often assume that their home insurance requirements are fulfilled with this automatic coverage.
But that’s not the case - property insurance only provides insurance coverage for the building or the physical premises of the house, not the contents within it.
Annual premiums are quite affordable
Based on an analysis conducted by Souqalmal.com last year, the cost of insuring home contents and personal effects in the UAE hovered around an average of 0.6 percent of the value of those items.
So, if the total value of your home’s contents was an estimated AED 50,000, an insurance premium of AED 300 per annum is all it would take to protect these items against loss or damage.
The coverage is extensive…
A typical ‘Home Content Insurance’ plan covers your contents like furniture, appliances, art, and personal effects against loss or damage due to perils like fire, flooding, earthquake, lightning, storm, theft, riots and vandalism.
Below are some of the unique benefits of home contents insurance that you may not be aware of:
- Occupier’s legal liability: Any household member’s legal liability arising due to injury to another person or loss/damage to property will be covered up to a pre-specified amount.
- Tenant’s liability: The loss or damage to the home’s fixtures, fittings, cables, pipes and such, that you are legally liable for as a tenant, are covered by the insurer up to a pre-specified amount.
- Alternative accommodation: The insurer will pay for the lost rent or cost of comparable alternative accommodation if your house becomes unfit to live in.
- Contents temporarily removed: Your coverage extends to the items that have been temporarily removed from the premises of your home for cleaning, repairs, maintenance and renovation.
- Frozen food: Damage to the food stored in your deep freezer due to an electric failure or breakdown is also covered.
… But be aware of exclusions
It is important to read through the list of exclusions in your home contents insurance policy, so you don’t end up unknowingly invalidating your cover.
Here’s a look at some common exclusions:
- Damage to contents due to regular wear and tear, or wilful neglect
- Loss or damage occurring after your house is left unoccupied for more than 45 or 60 consecutive days (or as mentioned in your policy)
- Loss or damage to high-value items like jewellery, collectibles and antiques, unless you take out a separate cover
- Loss or damage due to theft that occurs with the house not being properly secured, with no signs of forcible entry
- Loss or damage due to theft that is not duly reported to the police
- Loss or damage to contents if the home is lent, sub-let or shared with anyone other than your family
Ask the insurer for the policy wording before you buy the policy to avoid any nasty surprises. Also make sure you read the fine print after signing up to avoid having your claim rejected.
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