What to consider when buying insurance

Globally, 2020 has been an unpleasant year, to say the least, with the COVID-19 pandemic, political instability, and other tragic incidents such as the explosion in Beirut. So, what should residents should keep in mind when buying insurance? We are still in the middle of a pandemic, seen the damage to property on a monumental scale due to the explosion in Beirut, and simply cannot predict what will come next. While insurance is available to cover many possible risks, health coverage, and property and contents coverage are usually the most significant when individuals are considering the risks mentioned above, says Michael Kortbawi, Partner at BSA Ahmad Bin Hezeem & Associates.

“It is noted that in Abu Dhabi and Dubai, health insurance is provided by employers on a mandatory basis, while motor vehicle insurance is generally required as a condition to registering and legally operating an automobile. Property insurance such as premises coverage, which covers both a physical premises structure as well as the occupant’s contents, is often not mandatory and is thus an often-overlooked coverage that people should seriously consider obtaining. This is a particular problem for renters, who traditionally have been lax in obtaining this important coverage and then are faced with the loss of both their home and personal property with no or only limited chances of recovery in the event of a catastrophe such as a fire,” he says.

Read the fine print

First and foremost, considering purchasing insurance is itself a prudent move. When assessing any insurance policy, Kortbawi advises, it is important to take into account various high-level factors and then the details (the fine print) in the insurance agreements. You should consider:

1: The premiums and the payout -- input versus (possible) output. While securing a good payout in the event that a covered risk materialises is attractive, you do not want to be paying high premiums for an event that may not martialize in the first place. You will also want policies that insure the reasonable value of your property, as you do not want to be “underinsured” in the event of a loss. The considerations for health and property insurance are different, with the common key to be covered with appropriate amounts based on your risk levels. Most policies have some level of deductible, generally, with the premium cost increasing the lower the deductible is, so you will need to take this into account.

2 Minimise your risk in the first place. Do not think of insurance as a get rich quick scheme (in the event that something bad happens). Insurance is a damage limitation concept, and coverage often comes with limitations and exclusions.

3. Ask your provider what the policy you are interested in does not cover and ask them to explain any ambiguity. It is better to invest the time and effort at this stage than find out down the line that a specific risk was excluded when you thought it was covered. For example, property “All-peril” policies generally cover most occurrences, unless specifically excluded. “Named peril” policies generally cover only specifically designated risks. It is worth noting in view of the Beirut blast, that most “named peril” policies do include ‘explosion' as a covered risk. Similarly, some conventional health insurance policies exclude coverage when a disease is declared an epidemic or a pandemic, although this will likely be covered moving forward.

4. Shop around and consider bundling options. If you find a provider that fits your needs more than others, explore their offering in other insurance areas too. Insurers commonly offer discounts on premiums or better coverage for bundling multiple policies together, particularly regarding motor vehicle and premises coverage.

Health coverage

In the area of health coverage, as much as one would exercise care, physical accidents such as the explosion can affect people without their own fault. Similarly, one can contract a virus, especially one as highly contagious as the coronavirus, despite masks and other precautions. Medical expenses and care can be cripplingly expensive, not to mention one will likely not be able to work. You need to be adequately secure with the premium you are paying whilst also trying to ensure you are not worried about money if the covered risk materializes.

Dr Mohammad Maan, Head of Partner Clinical Operations, Oman Insurance Company, says the Dubai Health Authority (DHA) has mandated health insurance providers to offer complete coverage for costs related to COVID-19.

“In the UAE if an individual presents any respiratory-based symptoms related to or similar to COVID-19, this will be considered as a priority potential COVID-19 case. As mandated by the DHA, immediate treatment will involve a PCR (Polymerase Chain Reaction) test which will be covered under the insurance policy. Similarly, the individual’s travel history and contact with potential COVID-19 cases will play a role in the prioritisation of their case. Results will be delivered through the DHA app, following which a treatment programme will be initiated dependant on the categorisation of their case. Any medical treatments undertaken will be covered under their insurance including the cost of testing, treatment, medicines, and hospital admission, within the terms, benefits and limits of their plan. This includes individuals who have been suffering from cough, flu, respiratory issues, breathlessness even before opting in for a policy and discovering symptoms that are then transformed into the coronavirus disease,” he explains.

COVID-19 cases can be separated into five categories, each with their own treatment process:

Dr Mohammad says while Covid-19 will continue to be covered under the regulation of the UAE, it is important to review individual or company policies to ensure everyone is aware of their coverage. For those opting for elective surgeries where pre-admission testing is required by the government, check to ensure the tests will be covered by the insurance company. Similarly, if people are planning to travel outside of the UAE, it is important to be aware if their policy will cover COVID tests and treatments abroad as countries enter different stages of the pandemic. This is particularly important for those looking for international health insurance plans, as travel insurance typically excludes pandemic or epidemic-related costs.

“For expectant mothers, we place new-borns under the mother’s insurance until the baby has been registered in their own name, however many insurers require immediate health insurance for new-borns. It is important to check the policy to ensure that the child’s health is covered from birth, especially during this uncertain period,” says Dr. Mohammad.

According to him, “In this current situation, access to virtual care is imperative. In partnership with Bupa Global, the international administrator of Oman Insurance plans, we have recently extended the availability of our Global Virtual Care service where customers have access to virtual appointments 24/7 with international doctors, in multiple languages by downloading an app which is accessible globally.”

When you make a claim

Kortbawi says once you have found a policy that fits your needs on a high level, consider the details when seeking to make a claim in the event of a loss. For example:

A time limit for providing notice / making claims. Most policies have relatively short deadlines, which require submission of at least notice of a claim to the insurer. This is especially true in instances of property damage, where the tendency is to make repairs as soon as possible for business continuity. The damage should be documented at the soonest, and only urgent repairs should be made early, as insurers will insist on an inspection of the damage. You should provide as comprehensive a report as possible to your insurer at the earliest opportunity. That will help prove the damage while giving you some additional room to make repairs in case the claim process itself causes any delays.

Another important detail to consider is the claims process. You should know what information you need to provide (for example, what types of accompanying documents, photos or official reports, etc. are required) for the insurer to quickly process your claim. Technicalities that delay your ability to claim the insurance are sure to compound your stress at this time.