Real Estate Insurance in the UAE: Property Protection Against Natural Disasters and Other Emergencies

Real Estate Insurance in the UAE: Property Protection Against Natural Disasters and Other Emergencies

For anyone planning to purchase real estate in Dubai, it is worth knowing about the option of property insurance. Its importance can’t be overestimated, since it is insurance that provides financial protection against natural disasters and other risks. A standard policy insures the house itself as well as its contents.

This article aims to further explain the benefits and functions of real estate insurance in the UAE.


Insurance Features in the UAE

The specifics of property insurance in the United Arab Emirates are similar to the generally accepted standards worldwide. Firstly, insurance includes:

  • Real estate insurance: covers damages related to internal and external load-bearing constructions, including in the event of a disaster resulting from human error. An insurance event also occurs in the case of the property being damaged due to the fault of the management company or the developer.
  • Movable property insurance: any property located within the residential premises, inclusive of furniture, household appliances, etc.

Insurance can cover either one specific direction or all directions simultaneously, depending on the conditions of the insurance company.

Real Estate Insurance in the UAE: Property Protection Against Natural Disasters and Other Emergencies

Who May Need Insurance?


For most real estate owners, property insurance is a standard procedure. However, standard real estate insurance only covers your house/apartment (physical property such as walls, ceilings, and pipes). On the other hand, comprehensive insurance will cover the contents of your home and personal belongings.

Why You Need It

Natural disasters, fires, and other unfortunate events could not only affect the property you live in, but also your personal belongings. If you are the owner of a newly built apartment in Dubai where you currently reside, you should insure your belongings against any damage that may occur to your property.


If you are renting, the property itself will most likely be insured by the landlord, but this type of insurance only covers the physical construction of the property (the apartment/building itself) and does not provide coverage for your personal belongings. If there's a sudden electrical fire or a burst pipe while you're away, you might simply not be prepared to pay the cost of replacing all of your home's contents and personal belongings.

Why You Need It

Although the landlord's insurance covers damage to the building/apartment, it does not cover the loss of your personal belongings. As a tenant, you are advised to buy a content insurance policy; some policies even offer to replace damaged items with new ones.

Real Estate Insurance in the UAE: Property Protection Against Natural Disasters and Other Emergencies

The Cost of Real Estate Insurance

As a general rule, if you have home contents insurance, you can expect to pay out approximately 0.5% of the total cost of insurance coverage per year. To obtain worthwhile insurance, evaluate your household items before contacting an insurer.

Buildings are less at risk than personal property or vehicles, so insurance costs only 0.1% of the insured value per year. In contrast, car insurance will refund you from 2 % to 5 % of the insured value.

Insurance pricing is based on the cost of reconstruction and its risk profile. For example, buildings on land reclaimed from the sea are considered to be in a relatively high-risk area, and insurance is therefore valued accordingly.

UAE Insurance Costs

If you are going to purchase an apartment in Dubai and wish to buy insurance, be sure to find the appropriate insurance plan for you. There are about 50 licensed companies in the UAE that offer excellent insurance policies for homeowners, but don't be fooled by the insurance brokers' elaborate promises. Before deciding on any insurance policy, be sure to compare every detail of the plan to understand exactly how much of your property and how many of your valuables will be covered.

Keep in mind that, as with any insurance, you will need to pay a bonus payment (the amount payable for an insurance contract), so you need to evaluate which plan suits you and whether it is offered at the best price. A standard insurance plan can begin at AED 200 ($54.5) per year, but the cost depends on how much coverage you need.

Important Considerations

The first thing to check before signing any property insurance policy in the UAE is to estimate the value covered by the insurance. If you have items worth AED 100,000 in your home and your insurance plan covers less than half of that amount, it would be best to look for other options, instead of paying for an insurance policy that does not cover the actual value of your possessions.

Insurance plans provide detailed information about what types of property and what types of damage will be covered. It is important to study the plan you have chosen in detail to find out exactly what aspects it covers. Insurance companies may use different language, including the following: "All household items on your premises will be insured." In this case, it is important to know the definition of what “household items” refer to, as it is possible, for example, that electronics might not be considered part of this particular category.

Real Estate Insurance in the UAE: Property Protection Against Natural Disasters and Other Emergencies

When Is Insurance Not Paid Out?

Many people believe that if they buy insurance they will be able to compensate for the value of the damaged property in any scenario. However, this is not a steadfast rule. There are circumstances under which your claim may be denied. Negligence and false claims are some of the main reasons why an insurance company will deny a claim.

We recommend that you carefully read the provisions of your contract before making any commitments.

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