Car owners in the UAE are legally required to have a valid Third Party Insurance cover for their car. Given the wide variety of car insurance options offered by insurance companies, banks and brokers, it may be difficult to understand what each type of premium covers. It is important, however that you do your research before you make any buying decisions.
You can start this process by figuring out what exactly you would like covered and consider other items which could be covered as well. We’ve put together a comprehensive guide to answer all of your questions and help you choose a car insurance premium that’s right for you.
Understanding Insurance Quotes and Premiums
Car insurance is basically a contract between you and an insurance company, which protects you against monetary loss in the event of an accident or circumstances which may result in physical damage, injury, and loss related to your car.
To insure your car, you would normally start by requesting a quote – or an estimated cost of your insurance premium. You can get a quote directly from an insurance company, a broker, or from an online aggregator like Souqalmal.com.
Aggregators and comparison websites have become quite popular in recent years as they provide consumers with quotes from several insurance companies online, enabling them to make an informed decision before making a purchase.
Calculating Your Insurance Premium
A lot of factors come into play when calculating your car insurance premium. Information on your car and personal details about you such as your age, and driving history are among the key factors that will affect your premium and determine your level of risk and the total cost.
Another important thing you must consider is the decision to select one or more types of coverage, such as comprehensive, third party, or additional options which may or may not suit you.
Validity Period of Car Insurance Policies
Car insurance policies in the UAE are usually valid for 12 months but there is a one-month grace period that applies to contracts. Under UAE law, a valid car insurance policy is required in order to register or re-register a car.
Exclusions of Car Insurance
Your car insurance policy will only cover you for damages that are specifically mentioned in your insurance policy. For a detailed list of exclusions, it is recommended that you check the fine print in the contract.
Below you will find a few examples of items that are typically excluded from car insurance policies in the UAE:
- Routine maintenance is not usually covered by car insurance. This could mean that any damages, like oil leaks or engine damage, are likely not covered as such damages are not the result of accidents or unforeseen damage to the car. When buying a new car, your service package should include routine maintenance. Damages caused by catastrophic events such as war, radiation, nuclear exposure and explosions and bio-chemical attacks are not typically covered under car insurance policies.
- If your policy states that your vehicle is for private use only, damages done to your car while using it for business purposes will not be covered and may even void your policy. Business purposes may include using your car as a taxi or delivery service for commercial uses.
- Natural disasters such as floods, dust storms, hurricanes and earthquakes are not typically covered in a comprehensive car insurance policy, although add-on coverage against natural disasters can purchased.
Car Insurance Excess
- Car insurance excess is the amount of money you’re required to pay before your insurance provider covers the rest. It is a pre-determined percentage of repairs/loss or both that you are required to pay for each claim made. This percentage or amount will be listed alongside other vital policy information on your insurance card/policy agreement.
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- Example: If an accident costs you AED 3,500 in repairs, and your excess is AED 500, you will have to pay AED 500 of those costs before your insurance company pays the remaining amount of AED 3000 or up to the limit of your policy.
Car Insurance vs. Car Warranty
A major difference between car insurance and a car warranty is the level of protection each one offers.
- Car insurance protects you against financial loss in the event of accidents or circumstances that result in physical damage, injury and loss. Coverage is limited to the terms mentioned in your insurance contract. Comprehensive car insurance in the UAE is generally not provided for vehicles that are older than 7 years.
- A car warranty, depending on its type, is your car manufacturer’s responsibility. It is generally valid only for the first 3-5 years of a new car and typically covers particular replacement parts or repairs during the specified warranty period.
Checklist of Required Documents
When issuing a new car insurance policy, the following documents should be presented:
- Passport with visa page
- Emirates ID
- Copy of vehicle registration
- UAE driver’s license
- Confirmation that your vehicle is GCC specific
- Details of claims registered/ No Claims Certificate
Depending on your car, however, insurance companies may ask for additional documents such as a copy of your previous policy.Once your car insurance policy is issued, the insurer is required to share important documents with you which include:
- Car insurance policy: This provides you with the documentation of all the legal information regarding your coverage.
- Policy handbook: This will provide with comprehensive information about your insurance, i.e. terms and conditions, process for requesting a claim, claim phone numbers and exclusions.. It is advised that this policy document is read carefully to ensure that you fully understand your policy.
- Invoice – This is the proof of purchase for your payment.