Insuring household contents is not uppermost in the minds of many living in the UAE, although it can be done easily by opting for a home insurance plan .
Mohammad (name changed on request) was one of those who hadn't thought about it. When he returned to his three-bedroom villa in Dubai after a week-long vacation in Sri Lanka, he was shocked to find that the expensive carpets in his home were completely damaged after a pipe had burst. When he called his property insurance company, he realised his property insurance didn't cover the contents. As a mortgage buyer, he had taken out the property insurance as it was compulsory. It probably would have cost him under Dh1,000 more a year to cover the household contents, but instead he lost more than Dh100,000.
Mohammad's case is not an isolated one. Although the UAE has a low crime rate, accidents such as water spillage or fire can create a lot of trouble for property owners. Syed Asim, UAE country manager at Arab Orient Insurance, says home insurance is not something people normally buy in Dubai.
"People are aware of home-insurance policies, but they are not very keen to purchase them, especially Asians. Most Western expatriates prefer to buy the policy as it is common in their countries," says Syed.
Home insurance is different from property insurance. When you purchase a property, mortgage companies and banks insist that you purchase an insurance policy that covers your property. But this doesn't cover the contents of your house such as furniture, fixtures, cash, jewellery, curtains or personal belongings, which are covered under home insurance.
A matter of cost
Some are deterred by the cost of home insurance policies. The reality, however, is that a home insurance premium is negligible when compared to the expensive items in your home. It is, in fact, much cheaper compared with auto insurance and other policies.
However, it is higher than the cost of property insurance. For example, according to Arab Orient Insurance if the insured amount for a property was Dh3 million, the premium would be about Dh1,000 per year, while for contents worth Dh500,000, the premium would also be Dh1,000.
"Cash, jewellery and other valuables are also covered by the policy, but they have to be declared separately," says Syed.
"For cash and jewellery, if the insured sum is Dh250,000, the premium varies from Dh1,000to Dh2,000, depending on the insured items. However, the catch is the cost of one item should not exceed Dh10,000. Also, these items are covered within the premises of the house."
While insurance firms don't verify the exact cost of insured items at the time of application, it is better if customers quote the right price in order to avoid problems in the future. "Customers have to declare the correct values of the insured items. In the event of a claim, if we find the value of the contents to be lesser, the amount disbursed to them will also be reduced accordingly."
Application and claim process
The procedure to apply for home insurance is simple. You need not worry about producing a number of documents to get the policy as is often required for other policies.
In the case of Arab Orient Insurance, for instance, a customer can fill out a proposal form including his name, location of the property and sum insured. The insurance firm then processes the application and prepares a quotation based on the customer's requirements, which is sent to him for approval.
"Once the client approves the quotation, we go ahead and issue the policy which is valid for one year. If an expatriate client loses his job and is forced to leave the country, then he can cancel the policy and get a pro rata refund from us," says Syed.
The claim process is also simple. When the claims department of the insurance firm is notified of a claim, they send independent professional loss adjusters to the location to get the specifications of the damage.
"It is advisable that customers keep a record of what they have bought for their homes because it makes the process easier. In case of any claim, we investigate it thoroughly. The client has to prove he is a tenant or owner of that property and has to show us the documents," says Syed.
Generally, in a straightforward claim with all proper documentation in place, it will take about 15 days for the money to be paid to the claimant.
So, if you are one of those yetto get an insurance policy for your home and its contents, start scouting around for the best product on the market.
Select insurance providers
Mashreq
www.mashreqbank.com
Rakbank
www.rakbankdirect.ae
Arab Orient Insurance
www.insuranceuae.com
RSA
www.rsadirect.ae
