After you finally made the big purchase and become the owner of a brand new car. The last thing you want is to lose your hard-earned savings due to an unexpected event. Car insurance can financially protect owners against physical damage to their vehicle caused by accidents, collisions, theft, vandalism, natural disasters, and other causes.
Now the tricky part – how to select a car insurance policy? Should you go with the cheapest option on the market or the first one that comes your way? What aspects should your policy cover?
Why do I need Car Insurance in UAE?
According to UAE RTA law, all vehicle owners are required to obtain car insurance coverage. In addition, car insurance protects your vehicle financially in the event of an accident or natural disaster. In other words, the insurance company will pay for the repairs to your car as a result of an accident. Here’s a quick rundown of everything you need to know about obtaining car insurance in the UAE.
In Dubai, there are five types of car insurance policies available. Which one you choose is determined by the following factors:
Your personal needs – How much do you want the car insurance to cover? Your risk probability – whether you are the cautious type who wants to be ready for anything, or if you want to get the bare minimum because you believe the risk probability is low.
This Dubai car insurance guide will help you understand the 5 different types available so you can get the best protection for you and your vehicle based on your answers to the two questions above.
This is an insurance policy that protects you against both third-party and personal loss/damage. This covers loss/damage/loss caused by burglary, fire, external explosion, accidental collision, lightning, self-igniting, theft, and even malicious acts committed by a third party. Insurance companies are required by law to provide this policy at a maximum cost of 3%-5% of the car’s value. When purchasing this type of car insurance, you must thoroughly review the documents to ensure that every detail is correctly communicated to you. Typically, a comprehensive insurance coverage covers theft, profanity, fire, falling items, natural disasters (such a storm), damage caused to your car by animals, and some sort of civil unrest. Consult your insurance provider to find out exactly what is and is not covered.
Third-Party Liability Policy:
This is the most fundamental coverage required by UAE law. This covers any third-party death or bodily injury, 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 the other party is at fault, in which case you must file a claim with their insurance provider. This policy excludes claims for fire and theft. As a result, if you want more coverage options, you should look into other insurance policies.
Third-Party Liability Insurance (Theft and Fire Coverage Included):
This is an optional add-on that covers theft and fire clauses that are not covered by standard third-party liability insurance. If your basic third-party liability insurance only covers third-party damage, you can add on coverage for theft and fire. Please keep in mind that this add-on raises the premium cost.
Comprehensive Car Insurance Policy(with Add on):
This includes everything mentioned above and gives you the choice to receive additional care. This insurance offers add-ons including dealer repair, a free rental car, no-claim bonuses, and free insurance in GCC nations in exchange for an additional fee. The anticipated sum ranges from 3 to 10 percent of the car’s worth, depending on the insurance provider and whether a no-claim bonus is requested.
Premium Comprehensive Policy:
As the name implies, this is the best insurance policy in the UAE, covering almost everything you might need in a car insurance policy. In general, this policy is only available to a select group of clients who own sports or other high-end vehicles. Only a few select clients can obtain this type of policy by paying an additional 1% or 2%. If you own a luxury car, this is the insurance policy you should look into because it provides extensive coverage for your vehicle.
It’s time to look at the fundamental determining factors for premiums now that you are familiar with all the different types of auto insurance on the market. You might be charged higher insurance rates if you are under 25 years old. Additionally, the brand, model, and year of the vehicle affect the insurance cost. The cost of auto insurance premiums can be higher than normal if you wish to insure sports, luxury, or elderly cars (older than 5 years).
It is best to read over each car insurance policy and the coverage it provides. You should also consider the make, model, and age of your vehicle. There are numerous car insurance policies available in the UAE insurance market, but you must make an informed decision because it is a long-term investment of your hard-earned money.
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