A tenant doesn't have to spend a fortune to insure his belongings. A basic home insurance policy can cost from Dh150 to Dh1,500 per year, depending on the exposure and value of personal items covered.
Rumi Sanjana of Nexus Insurance Brokers says premiums for content insurance in the UAE are usually very cheap as the people who assess the risk on behalf of insurance firms calculate the possibility of loss, and due to the safe nature of most residential areas, the premium is "comparatively low."
"For example, to insure Dh200,000 worth of valuables kept within your property might cost within the region of just Dh800 per year," he says.
Most insurers say premiums are generally flat for all Dubai districts, whether a policyholder lives in Deira or the Burj Khalifa area.
At one insurance company, a standard "fire and perils insurance" that covers Dh130,000 worth of valuables can cost about Dh250 per year. This will cover loss or damage due to fire, natural calamities, overflowing or bursting of water pipes, impact by third party vehicles, aerial damage and burglary.
HSBC and Axa Insurance have also put together home insurance schemes, with annual premiums ranging from Dh350 to Dh1,500, to insure contents and personal belongings worth between Dh95,000 and Dh500,000. An additional Dh150 per year is required if a policyholder wants to include cover for a domestic employee, and Dh100 for important documents such as passport, labour card and driving licence.
Sanjana says premiums for plans that provide tenant liability (with limits of up to Dh150,000 to Dh250,000); personal liability (Dh500,000 to Dh1 million); and cover for domestic maid's death (Dh35,000) and repatriation (Dh5,000) can range from Dh400 to Dh1,400. However, those who keep the size of the premium to a minimum often find themselves facing significant problems down the road.
"One of the big problems is that people tend to look at the book value of their assets alone when determining how much insurance they need. Adding the original cost of each asset together is used as the rough equation to cover the total insurance required," he says.
"This ensures a cheaper premium, but the problem is that prices rise, so that the cost of replacing items is much higher in real terms than what you've accounted for. A sofa you've had since 1997 is likely to be significantly more expensive in 2010."
