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No contents insurance in Dubai? This is madness.

A burnt down apartment

The most common response to why people don’t have this cover is that they do not have enough to insure.

November 27, 2012 5:36 by

The distressing events of this week have brought sharply into focus the subject of home contents and indeed, building insurance. While we can be thankful that no-one has died, there are now still hundreds of people who have been left homeless and have lost all their worldly possessions.

The first thing that I hope would come out from this event is for people to start checking whether or not they are insured. Starting with building insurance – what is it? This to protect the actual structure of the building form damage or destruction, and while it is arguably less relevant, but if you own your own property, have you checked whether it is covered? If you have a mortgage the bank usually insists on this, but it is worth checking the cover to make sure it covers all eventualities and the sum assured is sufficient to actually rebuild your home.

My belief is that we ALL need contents insurance. According to various statistics, less than 10% of people have this cover in the UAE. To me this is simply madness. The most common response to why people don’t have this cover is that they do not have enough to insure. However, if you were to consider all of your belongings, then the value would soon add up – especially if you consider things like clothes, jewellery and electrical items, these can be worth many thousands of Dirhams, and that is not including the normal items such as furniture and house hold appliances. Therefore I believe it is vital to have good cover.

As always, any insurance is only as good as the terms and conditions, and so before you take cover out, make sure that you have done your research and asked some important questions, such as what is the cover for fire or flood damage (arguably more common than fire), what is the replacement basis for items that you are claiming for, does it cover alternative accommodation (and for how long) if your property is uninhabitable, what cover is there for accidental damage, at what value to you have to declare specific items, and are there any excesses to be applied to claims?

These are by no means a comprehensive list of things to consider, but hopefully they will focus the mind thinking about the cover.

When thinking about different ‘what if’ scenarios, it may be a good time to consider a wider financial planning review, as after all, if you are going to do a job, do it properly! If you are considering home and contents insurance, have you reviewed the rest of your protection requirements, such as life or critical illness insurance? Do you have a will in place?

All of these factors need to be reviewed regularly to make sure that all aspects of your financial well being are covered.

By James Thomas, Regional Director at Acuma Independent Financial Advice


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