When you scan your insurance policy, you look for the big numbers.
“Contents: AED 200,000.” Good.
“Liability: AED 1 Million.” Great.
You probably ignore Section F, Clause 4, tucked away at the bottom. It usually has a smaller number, like
“AED 50,000” or “AED 25,000.” It is called “Alternative Accommodation” or “Loss of
Rent.”
In a crisis, this tiny clause becomes more valuable than all your furniture combined.
The Nightmare Scenario
Imagine this (it happens every year in Dubai):
A fire breaks out in your building. Not even in your apartment—maybe three floors up.
The sprinkler system goes off. Millions of liters of water cascade down the building shaft.
Your apartment is not burnt. It is soaked. It smells of smoke. The Civil Defense puts yellow tape across the
lobby door: “Building Unsafe. Evacuated for 30 Days.”
It is 2:00 AM. You are standing on the sidewalk with your family.
Where do you go?
- Hotels are AED 600 a night.
- Price for 30 days: AED 18,000.
The Savior Clause
If you have “Alternative Accommodation” in your Home Insurance:
- You call the 24/7 hotline.
- They authorize a hotel stay immediately.
- They pay the bill.
This covers the cost of “Reasonable Accommodation” while your home is uninhabitable due to an insured peril
(Fire, Flood, Explosion).
Landlords Need It too (“Loss of Rent”)
If you own the apartment and rent it out, you have a different problem.
The tenant moves out because the fire destroyed the kitchen. The repairs will take 4 months.
The Loss: You lose 4 months of rent (AED 40,000).
BUT, you still have to pay the Service Charges and Mortgage.
The Fix: The same clause usually covers “Loss of Rent.” The insurance pays
you the rent money you would have earned if the fire hadn’t happened. It keeps your mortgage paid.
The “Reasonable” Trap
Note the word “Reasonable” in the clause. This is key.
What is Reasonable?
If you live in a Studio apartment, the insurer will NOT pay for you to stay in the suite
of the Atlantis Hotel.
They will pay for a comparable standard. Usually a 3-star or 4-star hotel, or a serviced apartment of
similar size.
The Limit: Most policies have a cap (e.g., 20% of Sum Insured). If your contents are
insured for AED 100,000, your hotel limit is AED 20,000. Once you spend that, the rest is on you. Do the
math before you book the luxury room.
Real Life Example: The Rain Flood
Consider the massive rains that flooded villas in certain communities.
| Family A (No Alternative Accommodation) | Family B (With Cover) |
|---|---|
| House filled with sewage/water. | House filled with sewage/water. |
| Had to stay with friends on a couch for 2 weeks. stressful. | Checked into a nearby Rotana Hotel for 2 weeks. |
| Paid AED 3,000 for dry cleaning clothes. | Laundry service covered by hotel allowance. |
| Status: Miserable. | Status: Safe and Comfortable. |
The difference in premium between Family A and Family B? Probably AED 50 per year.
FAQ: Emergency Housing
Q: Does it cover food?
A: Usually no. You have to eat anyway, even if you were at home. It covers the extra cost of
living. If eating at the hotel is significantly more expensive than your grocery bill, some generous
adjusters might pay the difference, but don’t count on it.
Q: Does it cover my pets?
A: This is tricky. Most hotels don’t take pets. Some policies actally cover “Emergency Kennel Fees” to house
your dog/cat while you are displaced. Check for this if you are a pet owner.
If the limit is “Nil” or “Not Covered,” you are taking a massive gamble with your family’s comfort. Upgrade
it.