If you put safety before everything else, one of the first things you will do after buying a new car is getting a car insurance plan that adequately protects you and your vehicle from unforeseen circumstances. Unfortunately, many car owners think of auto insurance as an added liability and buy the first policy they stumble upon without even making an effort to understand its contents.
It is important to do your homework before buying a car insurance plan to get the best deal from your insurance company and know exactly what you are paying for.
Here are some helpful tips if you are a first-time insurance buyer:
Know what type of plan you need
There are broadly two types of car insurance policies offered in the UAE –
Third party liability insurance: Mandatory under the UAE law, this basic plan covers legal liabilities in the event of an accident where you are at fault. Under the TPL policy, the insurance firm is only liable to pay to the third party involved in the accident and will not cover the cost of repair for your car.
Comprehensive coverage: A comprehensive plan, as the name suggests, offers wider protection to the policyholder and pays for damages in case of accidental damage, theft, fire, vandalism, third-party damage and natural disasters. Essentially, it covers third party damage and damage to your own vehicle too.
Comprehensive coverage is optional in the UAE and tends to be costlier compared to a basic TPL coverage. Do thorough research on what both these plans offer before choosing.
Always read the small print
Not many people bother to read their insurance policy and remain in the dark about the scope of their coverage. For instance, does your car insurance cover just accident or both accident and breakdown? What is the geographical area within which your policy benefits apply? Make sure you take some time out to read the policy document carefully to know exactly what you are signing up for.
Learn all about add-ons
Insurance firms package their standard plans with some additional benefits such as Agency Repair, Personal Injury Protection, etc, that can push up the premium cost. Ask your insurance provider to explain all the additional benefits that are included in your policy and how you can add or remove them depending on your needs.
Brush up on the jargon
Car insurance plans are full of jargon which may confuse you, especially if you are shopping for a policy online. You will often come across terms like deductible, excess, no claims discounts, insured declared value, etc during your research. Take a quick glance at the glossary of common auto insurance terms as understanding them will help you interpret your policy better.
[Related: Motor insurance myths debunked]
Know compulsory deductibles
A deductible is an amount you, as a policyholder, commit to pay whenever you make a claim against your policy. The deductible can range anywhere from AED500 to AED2,000 and can vary depending on factors such as age, type of premium, etc. Typically, if you offer to pay a higher deductible, the cost of premium comes down.
Never buy without comparing
While purchasing your car, did you just select the first model you came across at the dealership? Most likely not. So why should your approach be any different when it comes to buying a car insurance policy? Comparing multiple plans and understanding the benefits each policy offers will help you arrive at a wiser decision. Comparison websites such as Souqalmal.com can help you compare multiple car insurance quotes in less than a minute.