A Guide To Navigating Home Insurance Claims In The Uae: What You Need To Know

A Guide To Navigating Home Insurance Claims In The Uae: What You Need To Know – Homeowners insurance (also known as home insurance) is not a luxury; it is a necessity. That’s not just because it protects your home and belongings from damage or theft. Almost all mortgage companies require borrowers to have insurance coverage for the full or fair value of a property (usually the purchase price) and will not make a loan or finance a residential real estate transaction without proof of this.

You don’t even have to own your home to need insurance; many landlords require tenants to maintain renter’s insurance coverage. Whether it’s necessary or not, it makes sense to have this type of protection. In this article, we will learn about the basics of homeowners insurance policies.

A Guide To Navigating Home Insurance Claims In The Uae: What You Need To Know

Although they are customizable mobiles, a homeowner’s insurance policy has some standard elements that provide the costs the insurer will pay. Each of the main coverage areas is discussed below.

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In the event of damage from fire, hurricane, lightning, vandalism or other covered disasters, your insurance will provide you with compensation to repair or completely rebuild your home. Destruction or breakage caused by floods, earthquakes and poor home maintenance is generally not covered and you need separate riders if you want this type of protection. Detached garages, sheds or other structures on the property should also be covered separately using the same guidelines as the main home.

Clothing, furniture, appliances and most other contents of your home are covered if they are destroyed in an insured catastrophe. You can also get ‘away from home’ cover, so you can make a claim for lost jewellery, say, anywhere in the world. However, there may be a limit to the amount your insurance will reimburse you. According to the Insurance Information Institute, most insurance companies will provide coverage for 50% to 70% of the amount of insurance you have on your home structure. For example, if your home is insured for $200,000, that would be about $140,000 in coverage for your belongings.

If you have a lot of high-priced possessions (fine art or antiques, jewelry, designer clothing), you may want to pay extra to put them on a specific schedule, buy a rider to cover them, or even buy a different policy. .

Liability coverage protects you from lawsuits filed by others. This clause also includes your pets! So if your dog bites your neighbor, Doris, it doesn’t matter if the bite happens in your house or at hers, your insurance will cover her medical expenses. Alternatively, if your child breaks the Ming vase, you can claim it back. If Doris slips on pieces of broken vases and sues for pain and suffering or lost wages, you’re probably covered for that too, just like if someone was injured on your property.

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While policies can offer up to $100,000 in coverage, experts recommend at least $300,000 in coverage, according to the Insurance Information Institute. For additional protection, for a few hundred dollars more in premium, you can purchase an additional million dollars or more through an umbrella policy.

It’s unlikely, but if you find yourself forced out of your home for a while, it’s without a doubt the best coverage you’ll ever buy. This part of the insurance coverage, known as additional living expenses, will reimburse you for rent, hotel rooms, restaurant meals, and other expenses you incur while waiting for your home to be reoccupied. Before booking a suite at the Ritz-Carlton and ordering caviar from room service, however, be aware that policies impose strict daily and total limits. Of course, you can expand those daily limits if you’re willing to pay more for coverage.

All insurance is certainly not created equal. The most expensive home insurance will probably give you the least coverage, and vice versa.

In the US, there are industry-standardized homeowner’s insurance policies; They are designated HO-1 through HO-8 and offer different levels of protection depending on the homeowner’s needs and the type of residence being covered.

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Actual cash value covers the cost of the home plus the value of your belongings after deducting depreciation (ie, how much the items are worth today, not how much you paid).

Depreciation deduction, so you can repair or rebuild your home to its original value.

Best of all, this inflation buffer policy pays whatever it costs to repair or rebuild your home, even if it’s more than your policy limit. Some insurers offer extended replacement, meaning more coverage than you bought, but there is a ceiling; it is usually 20% to 25% higher than the limit.

Some advisors believe that all homeowners should purchase replacement value policies because you don’t need enough insurance to cover the value of your home, you need enough insurance to rebuild your home, preferably at current prices (which will likely have gone up since it was purchased or built). ). Guaranteed replacement value policies will increase replacement costs and give the homeowner a cushion if construction prices rise.

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Homeowners insurance policies typically include coverage for perils and events that may cause damage to your property or possessions. However, there are also the usual exclusions, which are situations or events not covered by the standard policy. If you want coverage for many of these specific items, you will likely need to purchase separate or private coverage.

There are several natural disasters that are not covered by standard coverage. Homeowners insurance usually does not cover flood damage. Earthquake damage is typically excluded from homeowner’s insurance policies. Although some policies have limited coverage for sudden and unexpected sinking damages, they often exclude large or gradual sinking damages.

There are some household repair and maintenance expenses that are not covered. Many standard policies exclude damage from sewer or drain backups. Repairs or replacements resulting from normal use are also generally not covered. Damage caused by termites, rodents, other pests, mold and mildew can also be ignored, especially if preventive methods are not taken.

Finally, there are many acts that do not constitute coverage. Damage caused by war, terrorism, or civil unrest is not usually covered by homeowner’s insurance policies, nor is damage from nuclear accidents or radiation. If you intentionally cause damage to your property, your insurance policy is unlikely to cover it. In addition, if you need to rebuild or repair your home after a covered loss to meet updated building codes or laws, the additional costs may not be fully covered by a standard policy.

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So what’s driving the rates? Rates are generally set based on the likelihood of the homeowner filing a claim, the insurer’s perceived “risk.” To determine risk, home insurance companies consider the homeowner’s past home insurance claims, as well as claims related to that property and the homeowner’s credit.

While insurers are in it to pay claims, they are also in it to make money. Insuring a home that has had multiple claims in the past three to seven years, even if a previous owner filed a claim, can raise your home insurance premium to a higher price. You may not even be eligible for home insurance, depending on the number of recent claims submitted, the Bank said.

Neighborhoods, crime rates and availability of building materials will also play a part in determining rates. And, of course, coverage options such as deductibles or add-ons for art, wine, jewelry, etc.—and the desired amount of coverage—also factor into the size of an annual premium.

What else affects your rate? In general, almost anything that poses a potential risk can affect your rate. For example, a home that is not well maintained can increase the need for major damage. Another example is that a house with a specific type of dog is more susceptible to damage. At a high level, rates are set based on the likelihood that the insurer will pay for the claim. The more variables that contribute to that risk, the higher your rates will be.

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While it never pays to skimp on coverage, there are ways to lower your insurance premiums.

A burglar alarm controlled centrally or linked directly to a local police station will help reduce a homeowner’s annual premiums by perhaps 5% or more. To get the discount, the homeowner usually has to prove central control to the insurance company through an invoice or contract.

Smoke alarms are another great thing. Although standard in most modern homes, installing it in older homes can save the homeowner 10% or more on annual premiums. CO detectors, clocks, sprinkler systems and, in some cases, weatherproofing can also help.

Just like health insurance or car insurance, the higher the deductible the homeowner chooses, the lower the annual premiums will be. However, the problem with choosing a high deductible is that claims/problems that typically cost only a few hundred dollars to fix (such as broken windows or damaged siding from a leaky pipe) will likely be absorbed.

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