Real Estate Insurance in Dubai

Real Estate Insurance in Dubai

02.09.2024 (updated 02.09.2024)

  • AX Blog
  • Real estate insurance in Dubai | AX CAPITAL

In Dubai, there is no law requiring insurance for purchased real estate, except for mortgage financing. However, insurance can significantly ease the expenses of the owner in case of emergencies. Insurance holds particular value for investors, for whom real estate is a valuable asset. In this article, we will further discuss the specifics of real estate insurance in Dubai.


Is it mandatory to insure property in Dubai?

Property insurance is not required for owners; the decision to insure one's property is entirely up to the owner. However, if you are using mortgage services, insurance becomes mandatory.

It is important to note that residential complexes and multi-apartment buildings already have a certain type of insurance. According to current law, the developer is responsible for insuring the entire building, both during construction and after the housing is put into operation. If the building is damaged in an incident, the owner is responsible for repairing it, but this does not apply to the apartments themselves. This law does not extend to townhouses and villas; the decision to insure them is also solely up to you.

Property insurance rates in Dubai

It’s essential to understand that there are two types of insurance policies for residential properties in Dubai. The first type covers damage directly affecting the structure of the house or apartment, while the second type insures the contents of the property. The rates for these policies differ. Building insurance typically costs 0.1% of the insurance payout amount, while contents insurance may cost around 0.5%.

Additionally, it's important to consider that insurance premiums may be higher for properties located in high-risk areas. Coastal regions and artificial islands carry a greater risk of natural disasters, resulting in higher insurance premiums. Expect an increased cost if your property is situated in areas such as:

Consequently, the annual cost of property insurance can range from $50 to $200.

Aerial view of Hayat Island.
Hayat Island in the Persian Gulf.

Key features of real estate insurance in Dubai

The most popular insurance policies guarantee compensation for damage in case of fires or natural disasters. This is because of the city's notably low crime rate and the inclusion of continuous surveillance systems in all modern residential complexes or neighborhoods. However, you have the freedom to determine the specific incidents that the insurance provider will acknowledge as insured events.

Another crucial point commonly employed by insurance companies is that coverage may be declined if the insured property remains unoccupied for over 60 consecutive day

How to get real estate insurance in Dubai?

In Dubai, there are approximately 50 licensed insurance companies that can be entrusted with insuring your property. Without obtaining a license from the government, a company is not allowed to provide insurance services in the UAE.

You can review the offerings and terms of each company, and then choose the most suitable option. Some insurers also offer additional services to clients, which may be included in the policy cost, such as temporary accommodation. Afterward, you need to provide the company with a set of mandatory documents. Depending on the type of insurance, these documents may vary.

Is it worth insuring property in Dubai?

Natural disasters are extremely rare in Dubai, but other dangers should not be overlooked. Fires are usually the main cause of property damage. While the developer will take care of repairing damage after a fire, they are not responsible for restoring the tenants' belongings. A property insurance policy can also ease the burden for landlords whose property may be damaged by unscrupulous tenants.

Property insurance is not widely popular in Dubai. However, considering the low cost of obtaining a policy and the guarantee of receiving payment in the event of a claim, it is worth considering. Thus, insurance becomes an additional safety net that can help cover damages in case of an unfortunate event.

Real estate investments in Dubai

If you are interested in real estate investments in Dubai, contact the experts at AX CAPITAL. Based on your preferences, our agents will assist you in finding the best housing option tailored to your budget and goals.

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