Homefront: ‘Is it mandatory to have property insurance in the UAE?’

It is compulsory to take out cover with a mortgage purchase and optional when buying with cash

Property insurance covers your home, garage, carport, outbuildings, gates and fences, along with any permanently attached fixtures. Alamy.com

I am thinking about buying my first property in the UAE and have been carrying out research on homeowner insurance. I am finding it difficult to understand the difference between property insurance and home contents insurance – are they the same?

I would also be interested to know your view on the benefits of taking out homeowner insurance.

Is it mandatory to have property insurance in the UAE? And if I purchase an apartment, will the building insurance cover the property in case of any incidents such as a fire? JA, Dubai

The first thing to clarify is the difference between property insurance and home contents insurance. The main difference is whether structures and items are attached or not attached to the physical building you are insuring.

Property insurance covers your home, garage, carport, outbuildings, gates and fences, along with any permanently attached fixtures such as solar panels, walls, ceilings and floor coverings for loss or damage caused by a range of insured events.

Contents insurance covers only the loss or damage to items inside your home as a result of insured events. Such property includes household items that you own or are responsible for and use primarily for domestic purposes, such as furniture, furnishings, clothing, unfixed electrical goods and appliances.

When buying a property via bank finance, the lender will insist that the loan is protected with property insurance to cover any losses to building costs and/or major maintenance. This is mandatory with mortgage finance but only advisable when buying the property with cash.

Contents insurance remains solely at the occupier’s discretion. If the occupier decides not to take out any insurance and a worst-case scenario happens, the repair or maintenance of any affected goods will be their responsibility.

Often, we hear stories of owners or tenants losing their belongings because of fire or flood damage caused by appliances, especially washing machines and boilers or water heaters, which can leak or blow up in extreme cases and damage other items.

This damage can also affect neighbouring property, especially when dealing with leaks or flooding in apartments. The responsibility of damage to third-party furniture or property is always a contentious subject but if insurance is taken out, the headache and expensive repair can be alleviated.

I plan to list my property for sale with a property broker in Dubai. What documents can I ask for to assess whether he is competent enough to negotiate on my behalf and represents my best interests?

I would also like to know whether I am dealing with an authentic, licensed broker. What questions can I ask him to establish his credentials? HP, Dubai

When looking to hire a broker to sell your property, the first thing to ask for is the Real Estate Regulatory Authority registration number, both for the agency and the individual broker. You will be able to check these credentials online via the Dubai Rest app.

Within the application, you will be able to view the office details, previous sales transactions and download the broker's card, in addition to being able to contact them directly.

In terms of knowledge and area specialisation, I suggest you use a broker who knows the community where your property is located very well. Request details of similar property they have sold in the location to ensure you have an understanding of their experience.

Access to industry data is very important, so ask for evidence of past sales from the broker, not only from the agency but also of the entire market.

Lastly, sales experience within the Dubai market is crucial. Ask the broker how long they have been in Dubai and also establish the experience they have as an agent, in general, and in the emirate’s property market, in particular.

Knowledge of this is imperative as it will help you to understand the breadth of experience the agent has and, therefore, their ability to leverage this to help sell your property.

Mario Volpi is the sales and leasing manager at Engel & Volkers. He has worked in the property sector for more than 35 years in London and Dubai. The opinions expressed do not constitute legal advice and are provided for information only. Please send any questions to [e-mail]