Why you should have it
In the UAE, we are fortunate to live in an environment with a low crime rate, one that is also relatively free from natural disasters like fires, earthquakes and floods. However, we're not immune to tragedy, building fires for example are a rare but real risk to landlords and tenants. We may not realise it, but insuring your home and its contents can be as important as insuring your health or car. Especially if you're planning a holiday, having comprehensive cover can keep your mind at rest whilst you are away. We have discussed below everything you need to know about home contents insurance and why you should consider getting it.
What is home content insurance?
Home and contents insurance covers loss or damage to the valuable items within your home, this includes furniture, fittings, electronics, art, jewellery, clothes and other valuables.
Types of home content insurance
Content insurance- Includes household goods like furniture, appliances, TVs, carpets, etc.
Personal belongings insurance- Includes items like jewellery, mobile phones, laptops, tablets and other portable electronic devices.
Dr Tariq Bin Hendi, Executive Vice President and Head of Products & Advisory for Retail Banking and Wealth Management at Emirates NBD Group said, “Emirates NBD offers customers comprehensive home contents policies that cover a range of items, from home furnishings to electrical and kitchen appliances to personal valuables such as laptops and cameras to precious possessions such as your wedding ring or other jewelry. It is recommended to invest in home contents insurance whether you rent a home or own one. Cover can be for accidental damage, for instance from fire or a water leakage, or in the event of loss from a break-in or theft.”
Types of insurance coverage
One should contemplate a comprehensive home contents insurance package that covers against fire and allied perils, including lightning, storm, flood, theft and mechanical or electrical breakdown.
Mohsin Aikal, Head of Liabilities for Noor Bank said “The two main types of contents insurance are “Replacement Value” and “New for Old."
New-for-old means you are covered for the full cost of replacing lost or damaged possessions with new possessions. You will generally pay a higher premium for new-for-old cover.
Replacement value covers only the value of the possessions as per their current worth. It is important to note that the value of most items depreciates each year.
Dr Tariq Bin Hendi recommends obtaining ancillary covers for activities like moving house within the country or to protect the belongings of visiting friends and family. Policies can also be purchased to mitigate accidental damage to a rented home or to a neighbour’s property, providing peace of mind and security.
Home contents insurance policies can go beyond covering the cost of lost or damaged items. Some providers offer packages that include provision of alternative accommodation, global coverage of personal belongings and more. Mohsin Aikal further explains the benefits of these additional levels of cover.
Personal belonging cover outside the UAE- Relevant to people travelling overseas. Personal belongings like jewellery, lap tops, phones are covered globally against, loss, theft, or accidental damage.
Alternative accommodation- As the name suggests, if one has to move out of home, due to an event that renders the accommodation uninhabitable, the insured family members are provided with suitable short term accommodation.
Tenants liability- Cover for costs that one may be liable for as part of the tenancy agreement, resulting from damage to fixed glass, doors and other fixtures & fittings.
Occupiers personal liability- Covers costs that one may be legally obliged to pay for accidental death, disease, illness, physical injury or damage to the property of a third party due to an accident in the insured home Visitor’s personal effects- Pays for any loss or damage occurring to personal effects of anyone visiting the insured home
Loss of documents- Pays for loss or damage to vital documents like passports.
Things to keep in mind before buying a home content insurance
Before you buy a home contents policy, take a walk through your house to make a list of your valuables, including jewellery, electronics, documents such as passports, and do your homework. Compare policies for levels of cover and premium & excess charges. Mohsin Aikal of Noor Bank suggests a few handy tips to bear in mind
before purchasing a home contents insurance policy.
• Assess the value of the home contents to ensure sufficient cover. To simplify, list everything that you own and add up what it would cost to replace every item at today’s prices.
• For the more expensive items like fine jewellery, antiques and watches, it is best to get an expert evaluation to ensure sufficient coverage.
• Don’t be tempted to underinsure your homes contents in favour of a lower premium. This will increase out of pocket expense in the case of a claim.
• Compare the options available for a competitive product offering. Do not compromise key features for nominal difference in premium amount.
Be aware of exclusions
It is strongly advised to read through the list of exclusions in your home content insurance policy, so, nothing comes as a shock should you ever need to claim.
Dr Tariq Bin Hendi of Emirates NBD Bank said “When taking out a home contents policy, customers should be aware of policy exclusions which typically include mechanical and electrical equipment breakdowns from wear and tear, damages occurring if your home is not occupied for a certain number of days and others.”
Actual cost depends on the level of insurance cover that you choose, however, it starts from as little as Dhs 250 for the year, that's less than 1 dirham per day. Before you sign anything, read the detailed policy wording and make sure you know exactly what you're buying.