You have an eye on your dream car, price is agreed, financing sorted, but before closing the deal you must go through the unavoidable procedure of getting an insurance policy issued.

This crucial step is not to be taken lightly. Insurance policy contracts are often filled with technical terms and professional jargon. If you don’t understand these completely before signing up, it could literally double up the cost of your car coverage or get you to pay out unreasonable amounts in case of an accident. To avoid such situations, below is our practical guide on understanding your insurance policy contract.


This is probably the first line you will look at since it will define the amount your insurance will cost you on a yearly basis (13 months in UAE). The premium is a fixed amount paid out usually in one time when signing the contract. If you are below 30 and driving a performance car or had several accidents in the previous year(s), your premium may be topped up accordingly.


Also called excess, this is the amount you agree to pay out of your pocket, without any objections, for damages resulting from an accident in which you are at fault. Generally, choosing a higher deductible will lower your premium, and opposite. Based on your age, the insurance company can also impose a higher deductible to be able to insure your vehicle.

Third party liability

When selecting this coverage option, which will considerably reduce the amount of the premium, you agree to support personally and fully the damages done to your vehicle in case of an accident at fault, while the insurance will cover for the losses/damages incurred by other parties involved. This is the minimum coverage level possible in a car insurance contract.

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Comprehensive Coverage

Also called full coverage, this guarantees that the insurance company will bear the financial liability in case of an accident at fault or damages to the car resulting from fire, theft, flood, vandalism, etc… Exact amounts covered for each scenario are summarized at the end of the contract usually.

Roadside Assistance

If this option is included in your contract, the insurance company will provide services such as towing, flat tire change, locksmith service or battery jump-start. This can be obtained for an additional premium fee or sometimes included by default in a comprehensive coverage package.

Agency Repair

This important point will define whether your car will be repaired by the official dealer of the car brand in your country/city, in case of an accident, or by an external garage appointed and accredited by the insurance company. This option is usually costing extra amount and is sometimes not available for vehicles over 5 years old.

Off-road coverage

This will define whether the insurance company will cover yourself, the passengers and the vehicle in case of accident or damages made during off-road driving (desert or mountain areas, circuit, etc…).

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International coverage

This will define whether the insurance company will cover you in case of accident or damages occurring during road trips across the border of the country in which the policy contract is issued. If you car is not covered, you might also not be able to cross the border unless you subscribe to a temporary local insurance contract for the duration of your trip.


Exclusions will list all the benefits and coverage you are not entitled to, based on the other terms of the contract and options subscribed to/included in the package.

No claims discount

Nowadays insurance companies will reward safe drivers with substantial discounts on the premium amount, provided they have a clean accident record for the previous year(s). This concerns only the accidents for which the driver was at fault.