After you’ve finally made the big purchase and own a brand new car. The last thing you want is for an unexpected event to cause you to lose your hard-earned savings. Car insurance can protect owners financially from physical damage to their vehicle caused by accidents, collisions, theft, vandalism, natural disasters, and other causes.
Now comes the difficult part: how do you choose a car insurance policy? Should you choose the most affordable option on the market or the first one that comes your way? What should your policy include?
Why do I require Car Insurance in the UAE?
All vehicle owners in the UAE are required by law to obtain car insurance coverage. Furthermore, car insurance financially protects your vehicle in the event of an accident or natural disaster. In other words, if your car is damaged in an accident, your insurance company will pay for the repairs. Here’s a summary of everything you need to know about getting car insurance in the UAE.
There are five types of car insurance policies available in Dubai. The following factors will influence your decision:
Your individual requirements – How much do you want the car insurance to cover?
Your risk probability – whether you are the cautious type who wants to be prepared for anything or the bare minimum because you believe the risk probability is low.
Based on your answers to the two questions above, this Dubai car insurance guide will help you understand the five different types available so you can get the best protection for you and your vehicle.
Comprehensive Car Insurance Policy:
This is an insurance policy that protects you against both third-party and personal loss/damage. This includes theft, burglary, fire, external explosion, accidental collision, lightning, self-igniting, and malicious acts committed by a third party. By law, insurance companies must provide this policy at a maximum cost of 3%-5% of the car’s value. When purchasing this type of auto insurance, you must carefully review the documents to ensure that every detail is communicated to you correctly. A comprehensive insurance policy will typically cover theft, profanity, fire, falling objects, natural disasters (such as a storm), animal damage to your vehicle, and civil unrest.
Third-Party Liability Policy:
The most basic coverage required by UAE law. This includes any third-party death or bodily harm, as well as property damage caused by the insured party’s vehicle. This policy does not cover loss or damage to your own vehicle unless you are at fault, in which case you must file a claim with the other party’s insurance provider. This policy does not cover claims for fire or theft. As a result, if you want more coverage options, you should consider purchasing additional insurance policies.
Third-Party Liability Insurance (Theft and Fire Coverage Included): This is an optional add-on that covers theft and fire clauses that standard third-party liability insurance does not cover. If your basic third-party liability insurance only covers third-party damage, you can supplement it with theft and fire coverage. Please keep in mind that this add-on increases the cost of the premium.
Comprehensive Automobile Insurance Policy (with Addition):
This includes everything mentioned above as well as the option of receiving additional care. In exchange for an additional fee, this insurance provides add-ons such as dealer repair, a free rental car, no-claim bonuses, and free insurance in GCC countries. Depending on the insurance provider and whether a no-claim bonus is requested, the expected sum ranges from 3 to 10% of the car’s value.
Premium Comprehensive Policy:
As the name suggests, this is the best insurance policy in the UAE, covering nearly everything you could possibly need in a car insurance policy. This policy is generally only available to a select group of clients who own sports cars or other high-end vehicles. This type of policy is only available to a few select clients who pay an additional 1% or 2%. If you own a luxury vehicle, this is the insurance policy to consider because it provides comprehensive coverage for your vehicle.
Now that you’re familiar with the various types of auto insurance available, it’s time to look at the fundamental determining factors for premiums. If you are under the age of 25, you may face higher insurance rates. The insurance cost is also affected by the vehicle’s brand, model, and year. If you want to insure sports, luxury, or elderly vehicles, your auto insurance premiums may be higher than usual (older than 5 years).
It is best to thoroughly review each car insurance policy and the coverage it offers. You should also consider your vehicle’s make, model, and age. There are numerous car insurance policies available in the UAE insurance market, but you must make an educated choice because this is a long-term investment of your hard-earned money.
