QUESTION: My brother and his family are leaving Libya and moving to the UAE in the wake of the revolution there and I am helping them move their belongings. However, I am concerned about what might happen during transportation and need to ensure things are properly insured at a low price. How should I proceed with this?
Answer: It must be a stressful time for your brother's family to be caught up in the Libyan unrest, and moving to a new country under such circumstances will be difficult for all both emotionally and financially. To minimise unnecessary stress, the best thing to do is to sit down with your brother and write a plan for the move, setting out all the items they wish to bring with them to the UAE, those that can be left behind, the funds available for the move and a timetable of events.
The main cost of the move will be shipping furniture from Libya to the UAE, an expense that will depend on how much furniture needs moving and how many containers are required. As a rough estimate the costs could be in the region of Dh30,000 per container. However, certain ports in Libya may be disrupted at present due to the fighting, so this will also need to be taken account of.
As you mentioned in your question insuring the valuables that are being transported against unexpected loss and damage is another key part of the moving plan. An independent financial adviser can set up a "relocating insurance" policy for the move from Libya, specially designed to protect personal possessions, including damage due to an unexpected disaster. You will need to check if this includes damage due to warfare.
Taking out a specific insurance policy for the move is necessary, as home and contents insurance policies do not normally apply during overseas transportation, and while relocation companies say they will pay a percentage of the costs of any damage or loss, this agreement is often ineffective unless you have proper insurance cover.
The cost of relocation insurance varies but it hovers at around 1.75 per cent of the shipment value. If there is a large proportion (exceeding 40 to 50 per cent of the total value) of glass, crockery, fragile items, some insurers could even charge a rate of 2.5 per cent. Insurance will be at full replacement value, which is important because in the event of a total loss the cost of replacement will be materially higher than the current value of your possessions.
Also, certain marine insurance provisions can add complexity to the shipment. Your financial adviser will also be able to explain this to you. It is also advisable to maintain a full inventory of the goods.
Rumi Sanjana is the director general insurance at Nexus Insurance Brokers LLC, www.nexusadvice.com
