JULY 2018

GARGASH INSURANCE INSIDER

Insuring your “Home Sweet Home” Key Points & Considerations

A home is where the heart is! For most, it is not only a place, but also a feeling. And like any other place (and feelings too), unfortunate & unforeseen events can wreck havoc to a person’s prized possessions. Home Insurance (sometimes called Home Owner’s Insurance or Householder’s Insurance) can make good a lot of those worries that goes with the financial impact which results from such events. One will be surprised to see how cost effective is to buy this protection.

1. Don’t hesitate, buy a Home Insurance Policy NOW

Procrastination is an evil and many have paid the price. In UAE, we have witnessed quite a few incidences of fire in residential buildings. And, unfortunately, many of the apartments/houses were uninsured resulting in financial losses to the owners and the tenants. So, get going and look for advices on this aspect. Insure your home as early as possible. But does one size fit all? Never. It is imperative that you buy the right Home Insurance covers so that it actually helps you in time of an unfortunate event. This takes us to our next point.

2. Get the right right policy

You need to understand your interest and buy accordingly.

  • If you are the owner of the apartment / villa and you have rented it out, Home Insurance policy will not be the best solution. For ownership apartments, the ownership association should ideally take a STRATA Insurance cover to protect the building and common areas. However, you can also insure the apartment and permanent fixtures therein. A basic PAR (Property All Risk) insurance will hold good. But, my suggestion would be to go for a full fledged Property Owner’s Insurance cover which will include the PAR part and is extended to cover your liabilities as a property owner.
  • On the above scenario, you should also ask your tenant to take a Home Insurance policy with a Tenant’s Liability cover, with adequate limits.
  • If you are staying in the apartment / Villa either as an owner or as a tenant, you should buy a Home Insurance policy. If you are the owner, you need to take the “Building” cover as well in your Home Insurance policy.
  • This brings us to our next challenge. How do you choose your covers? You can’t ignore any of the exposures and yet insuring out of turn doesn’t really pay off.

3. What are the Home Insurance covers that you should consider?

A typical Home Insurance Policy can cover the following: -

Having seen the type of policy to be purchased and the type of covers that should be taken, one last question still remains. How much of insurance is optimum?

4. Fix the correct Insured values

Don’t underestimate your values and similarly, don’t overestimate. The table below can come as a basic guide to fix the correct values.

Particular of Cover Advice for Sum to be Insured
Buildings / Structure (in case of an owner) Re-instatement value is the value considered by the insurers. So, insure at a value that corresponds to the cost of building (or buying) a similar property.
Contents Total sum of the replacement value for all items. Sometimes, you might need to make approximation but do it on the higher side. Premium differences would be negligible and when a claim occurs, the benefits are huge.
Personal Possession Don’t miss out any expensive items. You can just add the replacement value of all such items. Insurers might ask you to declare the items while applying.
Alternate accommodation Insurers can consider a specific percentage of your contents value. If not, please ask for higher limits.
Third Party Liability Our advice is to consider a reasonable limit. Please ensure that you take a good limit for tenant’s liability (if you are a tenant)

A home was not built in a day. It took away a lot of your sweat and your earnings in return of peace and protection. Thus it becomes very important to protect the valuable asset with an insurance cover that takes care of the financial losses you incur when you face with such accidental incidents.

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