Property insurance and mortgage (life) insurance in Dubai, UAE
8 March 2023
Property insurance or Home Insurance
It's not the original purchase price or current market value of the building that determines the value of the building required, but rather what it would cost to rebuild in the event of damage. In Dubai, building insurance is a prerequisite for any mortgage. Building insurance premiums are significantly less than the purchase price, ranging from 0.02 percent to 0.07 percent of the insured amount annually.
Note. The master developer or the owner of a residential complex is required by United Arab Emirates law to insure the entire building. So, if you’re buying an apartment in a residential building in Dubai, it should already be insured.
Property insurance for off-plan properties
Mortgage life insurance
Life insurance is mandatory if you’re planning on getting a property in the UAE through a mortgage. Mortgage life insurance is a type of insurance that’s intended to cover your mortgage debt in the event of your death. Most banks charge it on a monthly basis, independent of the loan. While some banks will require you to pay the insurance in advance, others will raise their interest rate to cover the monthly fee.
There’s also a cheaper option - taking out life insurance via an independent insurance company. Some banks accept life insurance policies from other organizations, however, each bank reserves the right to require life insurance under their program.
You must account for life insurance premium payments as an ongoing expense of mortgaged property ownership in your budget. For non-smokers under the age of forty, life insurance costs are relatively low for an average loan. However, expenses can rise rapidly as you get older, get sicker, and require more insurance.
Note. All pre-existing medical issues must be disclosed; otherwise, your claim could be denied and your family might not get the insurance benefit when they most need it.
To Sum Up
We advise you not to rush when choosing an insurance package and insurance company - take your time, do a little bit more research and carefully read the fine print. On the other hand, Kredium offers the best of UAE mortgages and real estate and provides end-to-end support, so if you need help with mortgage financing or finding the perfect real estate in Dubai for you, sign up or get in touch with us.
Visit our blog section for more information on the real estate and mortgage industry in the UAE.