Monthly Archives: November 2012

Contents insurance – are you covered?

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The recent fire in an apartment building in Jumeirah Lake Towers has made many people wonder how they would manage if the same thing happened to them. A recent survey showed that up to 86% of residents in the UAE have not arranged insurance for their possessions and home contents.

I suspect that in part this is due to people feeling safe as burglaries are few, but they do happen and I know of a number of reported cases of break-ins to villas in recent weeks. The big scare was the recent fire, where many people had to be urgently evacuated, although at the time of writing we don’t know how much damage was caused. Bear in mind however, that smoke causes a lot of damage and it is likely that many tenants will have to replace furniture, soft furnishings, clothing, pictures and other items.

If you have not yet arranged insurance for your possessions, it is time to take action.

What can I insure?

Contents insurance is arranged to cover the cost of replacing your personal possessions such as furniture, clothes and electrical items. ‘Personal belongings’ is a vaguer category that covers things such as jewellery, watches or cameras and also provides some cover for items taken out of the home.

It can be useful to include accidental damage to contents and personal items cover, as it is not uncommon to drop a vase, spill something on a rug and both children and pets can be surprisingly destructive. Whilst as a tenant it is not compulsory to have insurance, if you add up the cost of replacing everything you own you may be surprised just how much it is worth. You are covering yourself in the event of fire, theft and can also elect to choose insurance for accidental damage.

What if I employ a maid or other domestic staff?

If someone other than a family member is living in the property this must be declared on the application so their possessions are also insured. Some plans also pay out if domestic staff are injured whilst employed.

Who offers contents insurance?

There are a number of insurance companies operating in the local market, each with slightly different plans. It can therefore be useful to use an expert broker as they have access to more providers than an individual and save you time, as well as making sure you take the most appropriate options.

I don’t advise on general insurances, but I do recommend that you get a quote from a company dealing with 15 different insurers to suit your specific needs via this link  Home & contents insurance quotes

What should I do if I want to make a claim?

Before you take out the policy make sure you read the small print to make sure you are getting the cover you want and need. Be aware of the policy limits and restrictions and if there is an excess amount (also known as a deductible), the relatively small initial sum which is not covered. If you need to make a claim, contact the insurance company immediately, advising them of the situation. You may need to provide a police report for items that are stolen or receipts for items to be replaced.

Be smart, make sure your possessions are properly insured today.

keren@holbornassets.com

Do you need to organise your monthly budget?

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Annual income twenty pounds, annual expenditure nineteen six, result happiness. Annual income twenty pounds, annual expenditure twenty pounds nought and six, result misery.
Charles Dickens – David Copperfield.

Why do I need to have a budget?

From many conversations that I have with people across the UAE, emails I receive and messages whilst on air at Dubai Eye it seems that many people really need to address the issue of how to manage their personal budgets. Does your money run out before the end of the month?

If you need a little help, then read on.

Quite simply, if you don’t know what your outgoings are, how do you know if you are overspending? How do you know how much you are free to spend each month?

Building up a costly overdraft or running up credit card debts because you cannot make ends meet is not a healthy way to live. Once you have organised a budget you know exactly where you stand from a financial perspective and can relax in the knowledge that you are living within your means.

What are the steps to go through?

  • Calculate household income – after tax if  payable
  • Deduct rent or mortgage payments
  • Deduct loan and credit card payments repayments
  • Gather together bills to establish average monthly payments including food bills
  • Separate monthly payments into fixed or variable so you can make adjustments
  • Make an allowance for annual expenses, such as motor insurance, medical cover, gifts
  • Calculate income left after all expenses

Once you have a net figure you can then allocate monies for savings and investments and ‘fun’ money. Ideally you need to run a budget for a few months to take into account variables and anything that has been missed. It will need to be tweaked a few times to make sure that it works for you.

There are various programmes that you can download if you are the sort of person who likes to use spreadsheets, but I don’t think it is necessary and you can do it on a sheet of paper. It doesn’t really matter how you do it as long as you take control and manage your money.

Practical ideas

If you find it hard to keep tabs of what you are spending, you could give yourself a weekly allowance. Once you know how much you can spend, after fixed and essential expenses and savings, you should know roughly how much you can spend each week. Withdraw that amount in cash at the start of the week, don’t use any credit or debit cards, and make that cash last. Once you know that’s all you have and you have the notes and coins in your hands, you’ll think twice about buying unnecessary items.

If you need to cut back on expenditure consider things like reducing the number of take away coffee or drinks you buy; bring your own lunch to work a few times a week; try cheaper brands at the supermarket and locally grown vegetables at lower prices; compare prices at supermarkets as they can vary considerably; use loyalty and discount cards when shopping.

What else should I do?

Build up some cash savings so you can meet any unexpected bills without ruining your budget. If there is leeway to repay debts faster that is always a good idea. Another good plan is to set aside a little money every month to cover extra expenses such as holidays and birthdays.

Admittedly this is not an exciting thing to do, but it is worth spending a couple of hours each month checking your expenditure. That way you won’t run out of cash before the end of the month and will avoid worrying about paying bills.

Work is a reality for most of us, but establishing a proper budget allows you to enjoy yourself in the knowledge that you can actually afford to do so. Make sure that you manage your money; don’t let it manage you.

keren@holbornassets.com