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LANDLORD OR TENANT. WHO BEARS THE INSURANCE ?

October 06, 2020 | by Irfan Siddiqui , Property Insurance Specialist, Dubai

Unfortunately, when individuals sign their tenancy contract the majority have a misconception that they are covered by the landlord’s insurance policy, leaving them at risk of being liable for damage or losses. In fact, the only areas that the Property Developer and the Owner’s Association are responsible for would be the common areas, leaving the tenant solely responsible for their property and belongings inside their rented unit. Therefore, a tenant needs to take out their own individual insurance policy, and if they fail to do so, they will bear the costs for any incurred damages.

While having insurance to protect your personal belongings is standard in many countries around the world, just over one in ten UAE residents have a home contents policy in place and is surprising considering a spate of high-profile fires in Dubai saw some residents lose the entire contents of their homes. This is also far lower than developed markets, such as the UK, which global insurer Zurich says has a penetration rate of 75 per cent consumers subscribed to a policy.

This is because they believe policies are too expensive while others assume it is covered by their landlords. Majority of residents in the UAE live in rented apartments or homes, which are typically insured by the landlord. What most of us are not aware of however is that the contents of our home are not insured by the landlord’s insurance.

My answer to those who think home insurance is too expensive would be that, actually, it’s a bargain compared to the alternative of losing all of your belongings and having to replace them yourself.

Ease your mind; be worry-free by singning up with any home tenant’s all risk insurance cover.

If there is an attempt of theft or an accident in your home, you would not be compensated for the loss or damage of your favorite camera, laptop, solitaire ring and all the other valuable belongings that mean a lot to you.

There are products in the market which covers you for damage or loss of your belongings, all at a very affordable price – whether you are in the comfort of your home or have stepped out.

As every individual has different priorities, there are optional policy features, which you can add to tailor the cover to suit your budget and needs.

The coverage is extensive. A typical ‘Home Content Insurance’ plan covers your contents like furniture, appliances, art, and personal effects against loss or damage due to perils like fire, flooding, earthquake, lightning, storm, theft, riots and vandalism.

Below are some of the unique benefits of home contents insurance that you may not be aware of:

Occupier’s legal liability: Any household member’s legal liability arising due to injury to another person or loss/damage to property will be covered up to a pre-specified amount.

Tenant’s liability: The loss or damage to the home’s fixtures, fittings, cables, pipes and such, that you are legally liable for as a tenant, are covered by the insurer up to a pre-specified amount.

Alternative accommodation: The insurer will pay for the lost rent or cost of comparable alternative accommodation if your house becomes unfit to live in.

But be aware of exclusions. It is important to read through the list of exclusions in your home contents insurance policy, so you do not end up unknowingly invalidating your cover. Therefore do consult an insurance broker for the policy wording before you buy the policy to avoid any revolting surprises. Also make sure you read the fine print after signing up to avoid having your claim rejected.

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