Insuring against theft of valuable possessions

Question: During the process of moving to a wonderful new apartment in Dubai Marina, I was struck by the sheer volume and value of my possessions. Over the years my hard work has enabled me to gradually accumulate everything from designer furniture and decorative items to closets packed full of shoes and clothes. While I realize crime rates are extremely low in Dubai, I am starting to wonder if I should seek some kind of insurance to cover my back. What advice can you give me?

Answer: You are absolutely right about the crime rate in Dubai being relatively low, but one should never get too complacent. What's more, theft is only one of the many scenarios that can conspire to deprive you of your valuables and potentially leave you out of pocket — among other things, fire, water, natural disasters, unintended accidental damage can also be to blame.

You might be the most meticulous and careful person in the world, but you cannot legislate for bad luck and unfavourable circumstance.

Simply put, if you have a lot of valuables — and even if you don't — it is worthwhile getting appropriate contents insurance, which can be extremely reasonable. For example, the rate could be as low as 0.40 per cent of the total value per month for contents cover and in the region of 1.40 per cent for personal belongings' cover. The general rule of thumb used by insurers is that personal belongings should be around 40 per cent of the total value of contents insured.

Now that you're established in a new environment, the first thing you need to do is find out what is already covered by the building and its landlord(s).

Chances are you're on your own. The key function of the UAE's so-called ‘Strata Title Law' is to transfer responsibility for maintenance and upkeep from developer to the homeowner and, although some Homeowners' Associations are laudably proactive in both action and dissemination of information, this is usually just for building insurance.

When you seek out contents insurance, request "all risks" cover and make sure you are covered for the replacement value of your possessions rather than the depreciated value. For example if your sofa is damaged, you want to ensure you are fully reimbursed for a new replacement.

As accurate as possible

Irrespective of the policy you opt for, it is essential to be as engaged as possible. Insurance providers do not tend to verify the exact cost of your valuables at the application stage, so to save time in the event of a claim you should aim to be as accurate as possible.

Keep thorough records, including receipts and, where appropriate, photographs. Store these in a secure location — ideally off site, perhaps a safe at your office or bank. It is worth noting that you do not have to list all your contents, as most insurance companies in the UAE will only ask you to list specific items above a certain value for their reference. Be sure to double-check this point.

The policy can extend to cover cash and jewellery but they need to be declared separately. Items that are to be insured outside of the home do not need to be included in the contents sum insured figure, as there is a separate cover under Home Insurance available for those valuables.

Assuming everything is in order, it generally takes around two weeks until claims are paid in full.

To make sure you are covered in the best possible manner, you should talk to an independent financial adviser, fully understand your insurance policy, read the fine print and ask as many questions as you can about loss, theft or damage.

The writer is Director General Insurance, Nexus Insurance Brokers. Opinion expressed here are the writer's own and do not necessarily reflect that of Gulf News.