UAE is a booming market for car manufacturers, traders, buyers and insurance providers with over 3 million registered vehicles in the country. The government is making major changes in car insurance policies and car rental laws in the UAE. Here are a few things you should know about the newly introduced laws and regulations.

Pay-by-the-hour car rental services

If you are looking to rent a car, rather than buy one, the new car rental resolution is great news for you!

To offer enhanced benefits to rental car users and to regulate the car rental market, a new resolution has been passed by Sheikh Hamdan Bin Mohammad Bin Rashid Al Maktoum, Dubai Crown Prince and Chairman of Dubai Executive Council. The new law is intended to provide flexibility and low-cost alternatives to Dubai residents looking to rent a car.

How is this going to benefit us? The new facility will allow commuters to use a rental car for short trips on an hourly basis. Under this new resolution, cars can be rented for a maximum of six hours per day and can only be driven in Dubai. In addition to this, public transport users can pick or drop rented cars at metro or tram stations.

The resolution will also place a restriction on car rental operators who are not licensed by Dubai’s Road and Transport Authority. RTA will govern all activities related to authorization and establishment of car-rental businesses within the emirate.

[Related: What’s the cost of not having your car for a month?]

Car insurance policies will now offer higher coverage

New rules and regulations related to motor insurance policies in the UAE were recently announced by Sultan Bin Saeed Al Mansouri, Minister of Economy and Chairman of the Insurance Authority. The changes are aimed at bringing more transparency in car insurance regulation and higher benefits to customers. The new system will include:

  • Coverage claim against damage to property arising from an accident has increased from AED 250,000 to 2 million.
  • Motorists involved in an accident will now be entitled to get compensation for a rental vehicle for a maximum of 10 days and a value of up to AED 300 per day.
  • The insurance company is now liable to pay AED 200,000 in case of death of a member of the insured family, or anyone driving a rented, public or driver’s-learning vehicle.
  • The insurance company is accountable for repairing any damage to the vehicle which has been in an accident. In case the cost of repair exceeds 50% of its market value, the car’s value must be paid to the insuree provided the company’s liability is not more than AED 2 million.