Why Banks Require Property Insurance in Dubai for Every Mortgage

If you are buying a home with a loan, you will hear the bank say one thing very clearly: “You must have insurance.” They won’t give you the keys without it. But why does the bank care so much? Is it just more paperwork? No. It is about protecting the money they lent you. At CoverB, we help thousands of new homeowners meet these bank rules every year. Let’s look at why property insurance in dubai is the key to your mortgage.

The Bank’s Big Risk

When a bank gives you 2 million AED to buy a villa, they are taking a risk. They own a part of that house until you pay them back. If the house burns down and you have no insurance, the house is gone. But the debt is still there! Most people cannot pay back a 2 million AED loan if they don’t have a house to live in. The bank requires property insurance in dubai to make sure that if the building is destroyed, the insurance company pays the bank back. It protects their “Asset.”

The Two Types of Mortgage Insurance

Banks usually ask for two things:

• Life Insurance: This pays off the loan if something happens to you.

• Property (Building) Insurance: This pays to fix or rebuild the house if it is damaged.

You often have a choice. You can use the insurance the bank offers, or you can find your own. Many people don’t know that they can save a lot of money by choosing their own provider. Property insurance companies in dubai often have better rates than the “Standard” bank plan. At CoverB, we can often find you a policy that is cheaper and has better cover than the one the bank suggests.

What the Bank Looks For

A bank doesn’t just want any policy. They want a policy that covers the “Full Rebuilding Cost.” This is not the market value of your home. It is the cost of the bricks, the labor, and the materials to build it again from zero. They also want to see the bank’s name on the policy. This is called “Loss Payee.” It means if there is a big disaster, the money goes to the bank first to cover the loan.

Why “Contents” Still Matter to You

The bank only cares about the walls and the roof. They don’t care about your sofa, your TV, or your clothes. But you do! If you only buy the basic policy the bank asks for, your personal items are at risk. When you work with CoverB, we make sure the bank is happy, but we also make sure you are happy. We add “Contents Cover” so that your whole life is protected, not just the bank’s loan.

Don’t Let the Bank Overcharge You

It is easy to just say “Yes” to the bank’s insurance because you are busy with the move. But you could be paying 50% more than you need to. Before you sign, talk to CoverB. We can look at your mortgage offer and give you a better deal. Visit https://coverb.ae/property-insurance-in-dubai/ and see how much you can save on your mortgage insurance.