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What is your most precious material possession? Your wedding ring? Your vintage vinyl record collection? Perhaps it’s a book given to you by your grandmother. Whatever it is, the chances are it’s not insured. The vast majority of UAE residents have no home and contents insurance. This means that in a worst-case scenario, you could be left with no compensation for the loss of your most treasured possessions.
Once in a while, something happens in Dubai that reminds us all of the need for insurance cover at home. Think back to the Tamweel Tower fire in 2012 or the Torch Tower in early 2015. Or the most recent one at The Address Downtown Dubai on New Year’s Eve. Naturally, after an event like this, quote requests and applications for home and contents insurance will spike as people are suddenly made aware of the fragility of the lifestyle they enjoy here.
Sometimes people opt not to purchase home insurance because of low crime rates.
This means you presume that the greatest danger to your possessions is theft or criminal damage. The most expensive items in your home are perhaps least likely to be stolen, but the easiest to damage. A burst pipe in your living room could prove costlier than a burglar in your bedroom. A leak, gushing water across the floor or from a ceiling will not seek out things that are easy to carry. It will start adding to your shopping list new items of furniture, electronic goods, family pictures, light fittings, carpets, flooring, and so on.
A fire or structural failure can destroy dozens of homes in a matter of hours. Some unfortunate residents of tower block fires have found themselves left with nothing but the clothes they were wearing when they were forced to evacuate the building.
Most people simply don’t get around to buying cover for their home and possessions out of procrastination or complacency, but this delay can prove very expensive. As strange as it may be to hear from a financial adviser, the best case scenario with most insurance is that you lose all of the money you allocate to it. As with car insurance, life or critical illness cover, a home insurance policy that is never claimed is the most desirable outcome. It must be there because you need it if the worst happens.
When someone in the UAE buys a car, they are required to have insurance in order to register the vehicle. You could not possibly crash your home into someone else’s villa, but just a small fire, leak or flood in one home could ruin the lives and possessions of countless others.
Think back to the start of this article. What is your most treasured possession? How much would it mean, emotionally and financially, to you to lose that. Perhaps it’s time to speak to your adviser and find out the cost of making sure this wouldn’t be necessary.
Source: Edward Mainwaring-Burton, Special to Property Weekly