How Does Car Insurance Work in The UAE?

How Does Car Insurance Work in The UAE

Last Updated on September 7, 2022 by user

For most people, the insurance business is complicated and difficult to understand. When one thinks of insurance, keyword such as premiums, deductibles, excess and insured value come to mind. This article seeks to simplify the insurance process to make your buying decision as easy as possible.

Here are a few key terms to remember:

Premium: A premium is essentially the amount to be paid for an insurance contract. Once signed, the premium becomes income for the insurer. This amount is paid to the insurer for protecting you against damages or liability should they arise. 

Insured Value: This is the maximum amount an insurer will pay if the insured asset is a complete loss. In the case of motor insurance, if your vehicle is totalled (unsalvageable), then the insured value will be the maximum payoff received. This value differs based on the asset being insured. 

Excess: Excess is the first amount payable in case of a claim made. It is essentially the uninsured portion of your loss. Different insurers charge different levels of excess based on their rates. Usually, if the price of the asset is higher, the excess payment is higher as well. Furthermore, most insurers charge lower premiums for higher excess or vice versa.

Agency/Non Agency Repairs: This is how you repair your vehicle in case of damage to your car. If your plan includes agency repairs, you will be able to repair your vehicle at the local dealership. This plan is more expensive than non-agency repairs as it ensures your vehicle will be repaired to the highest standards of the dealership itself. If you have been claims free for more than 3 years, you also automatically qualify for agency repairs. Non-agency repairs mean you will have to repair your vehicle at any of the approved garages of the insurance company. This option is still reliable and affordable. It also means that you will likely have your car repaired and sent back before those who go straight to the dealership. This is because garages usually have fewer vehicles to work on than dealerships. 

Certificate of Motor Insurance: This is a document that provides insurance information and proof that you have insurance on your vehicle. In the case of an accident, RTA will ask you for this paper before filing a police report on your behalf. 

Insurance in the UAE:

Car insurance is valid for up to 12 months. Some insurance companies over the 13th month as an incentive to draw customers. Unlike other countries, the UAE insurance companies only allow annual payments as opposed to quarterly or monthly. Whilst this makes for expensive one-off payments, you can consider it as protection for you and your family in the unfortunate case of an accident. 

Things to Consider:

  • The reason you need insurance
  • What benefits do you want included?
  • How much are you willing to pay?
  • How many people do you wish to cover?
  • The reputation of your insurance company

Choosing The Right Insurer: 

  • Reputation: Does your insurance company have a strong reputation? Are the reviews and customer feedback positive? How long has the insurer been operating? Are they local or international? 
  • Inquire with others who use the insurer and ask about their experience. Have they filed claims in the past? If so, how long is the wait time? How was the customer service? How long till they got reimbursed?
  • Social Media: Follow your insurance company on social media platforms and see what they’re working on. You can even send them a quick message to see if they respond in a timely manner to gauge how receptive the company is.