Importance of property cover

Q: I have bought a new apartment in a residential complex in Dubai. As a first time property owner I would like to know what I need to consider in terms of protection and insurance.

A: Home and contents insurance should always be considered a priority. A person's property is often their most valuable asset, and is usually filled with items that have taken a lifetime to accumulate. There is too little awareness of the importance of home insurance in the Middle East market, and the repercussions can be devastating if disaster strikes.

Residents living in apartment complexes are exposed to risks that people residing in detached properties do not face.

For example, what if your neighbour forgets their bath is running and leaves for the day, causing the water to leak into your apartment, or if a fire starts in their kitchen and ends up damaging your apartment? Even worse, what if you are responsible for either of these scenarios causing damage to another person's property?

It is for these reasons that you must make sure you have the right type of insurance to protect yourself. Firstly, you need to find out what you, your neighbours and, the company managing the property are liable for in the event of an accident. It is important to know where you stand.

Any expert will tell you that property insurance is critically important to cover both your property and its contents. It offers security and peace of mind, and ensures that one of the biggest financial investments of your life - your property - is protected.

Therefore, when you're looking at insurance options, it's important to do some research - look across the full range of policies available and consider what is right for you, consult with the company that manages the property and find out exactly what their policy covers.

For example, is your apartment insured under the building insurance coverage for the actual replacement cost - the cost of rebuilding and replacing the permanent fixtures and contents - rather than just the market value.

Read the details

Be aware of what the insurance covers you for exactly - are you covered in the event of fire or flood? Some policies will contain provisions that enable you to move into comparable accommodation while repairs are being made, which is also highly desirable.

In terms of contents, your policy should protect household possessions like electronic goods, furniture and your books and CDs. It's important that your possession cover is accurate - that it reflects the correct value (Replacement costs) of the items - when you sign the policy. If you own valuable artwork or antiques, these may need to be insured separately under a separate schedule which normally is an extra cost.

If this all sounds complex, don't worry. If you look for a sound and reputable insurance broker or provider, they will be able to answer your questions and help you balance the different risks, based on your environment. They will also help you evaluate the estimated restoration costs of your new apartment, and assess the need for content coverage.

You've taken a big step in buying your first apartment. Now, you just need to make sure you're protected as you move forward..

- The writer is sales director at Nexus, a leading regional financial adviser. The opinions expressed above are the writer's and don't necessarily represent the views of Gulf News.

Please send your questions to: advice@gulfnews.com.