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Pay out before losing out

By Aimee Greaves


Days after the stormy weather that brought Dubai’s roads to a standstill and waterlogged many homes, residents are assessing the damage and counting the costs.

With the downpour also came the issue of contents insurance and who is going to pay for the devastation. Those whose houses were not damaged are also now investigating what is on offer when it comes to protecting their home from the elements. Following a recent announcement by the Dubai Land Department, it will soon become mandatory for homeowners to have their contents insured under the new Strata Law.

But while premiums for life insurance went up by 158 per cent last year to Dh1.651 billion, there is as yet no data about how many people have taken out insurance for their home.

This, says the Chairman of the Insurance Business Group Omar Elamin, is because contents insurance is not very popular. He says: “The majority of expats are provided with accommodation, a lot of which is serviced, so they don’t insure furniture that is not theirs. We recently launched a policy targeting New Dubai, which includes comprehensive cover for contents and buildings insurance, but as yet it is not that popular.”

Shopping for the right cover can be difficult, with unfriendly jargon and policies covering a range of different things. When Emirates Business called for quotes for cover for Dh50,000 worth of contents we were given prices ranging from Dh250 to Dh500 a year. A typical policy will insure your belongings against theft, as well as other eventualities such as floods and fire. But others won’t pay out if goods are irreparably damaged and clothes are not always covered. To make matters even more complicated, some companies will not give details over the phone and others demand a faxed list of all content that needs to be insured.  

A popular extra is to insure home contents against accidental damage, such as spilling coffee over a laptop. Look out for clauses that exclude things such as pet damage. You can also opt for items that you may take with you out of the home, such as jewellery.

D Sudhakaran, the senior manager of National General Insurance (NGI), says reading the small print on all policies is vital. “Different policies have different levels of cover. Not all policies include flooding, so the consumer must make it clear. Some policies used to only include accidental damage, but now the cover is more extensive,” he says.

It is not only homeowners who have realised the importance of contents cover. Axa – one of the largest insurance in the UAE – has also seen a rise in the number of companies taking out a policy after offices and warehouses were flooded. Julien Audrerie, the regional marketing manager at Axa, says: “People are still feeling the effects of the floods so while it’s clear the worst can happen now is the time to buy. Don’t leave it until the same thing happens next year.”

So how do you know which cover best meets your needs? Audrerie says most people fall down by underestimating the value of their goods, so making an inventory is essential. “If you put down Dh50,000, make a claim then realise you in fact lost Dh450,000 of goods, we will only replace Dh50,000. Similarly, if half of your house is destroyed by fire, we will only give you half the value of your cover, whether you lost more or not.”

Another point worth investigating is whether your insurer has a “new for old” policy. If not, then again you might find yourself out of pocket. In the case of large claims, a loss adjuster will be sent by the insurer for them to make their own assessment. Shafat Chisaty, the technical manager at Alliance insurance, says this is important for an accurate claim. “Without an assessment we can’t make an accurate payout,” he says.

For those renting their home, it is worth considering tenants’ liability insurance because it covers white goods, often included in the lease. If these are damaged the insurance company will pay out.

It can be an inconvenience to sort a policy, but Audrerie says it is worth it: “Make sure if you have a big problem you are covered.”

Find the right cover

For Dh50,000 of content

ALLIANCE INSURANCE (04 608 111) send request via fax

AXA (800 4845) Dh250 per year

HSBC (800 4560) Dh250 per year (Dh50,000 contents plus Dh15,000 personal items)

LLOYDS TSB (04 342 200) Policies are for customers only and are done through Axa

NGI (04 222 2772) Dh500 per year

DUBAI NATIONAL INSURANCE (04 269 1300) Dh500, jewellery not included

DUBAI INSURANCE COMPANY (04 269 3030) Fax inventory for quote

My story

NAME: Stuart Mansbridge, a 33-year-old security executive

LIVES: Dubai Investment Park. He spent over three days cleaning up his apartment after the heavy rains caused flooding throughout his home.

HE SAYS: “I don’t have contents insurance so have ended up losing a lot of my belongings. It’s something I’ve always thought about getting and even went as far as getting quotes, doing an inventory and writing a cheque, but never sent it off. I live on the ground floor so when the rain got so bad and started flooding the roads, it spread into my apartment. At it’s worst I was wading through a few inches of water throughout the apartment. It’s my own fault I didn’t have insurance to replace my things and now I’m paying for it.”