Last year, the UAE welcomed significant new developments in car insurance laws. The second half of 2016 saw the launch of a unified system for motor insurance policies, followed by the more recent announcement of revised tariffs for insurance policies by the Insurance Authority of UAE. And local newspapers seem to have explored every angle of the story…

… But if all this talk about the new laws and their possible implications has you feeling confused, here is a simple breakdown of everything you need to know about them.

Quick Recap: New car insurance laws in the UAE

Eight times higher coverage for damage to property

That’s right! Under the unified motor insurance law, the insurance cover for damage to property has been increased significantly. Your new policy will get you a cover of AED 2 million, instead of the previous AED 250,000, for claims arising due to damage to third-party property.

Compensation for a replacement vehicle

Anyone who’s ever been in an accident and without their car for the next week or so will definitely agree that this provision was long overdue. Now it is compulsory by law for insurance companies to compensate you for a replacement rental vehicle if you meet with an accident ( .. only if you were not at fault)! Compensation of up to AED 300 per day can be claimed, subject to a maximum of ten days.

Inclusion of family members in liability coverage

Under the new laws, insurance coverage has been expanded to include immediate family members of the driver (spouse, parents and children). The insurance company is liable to pay AED 200,000 in the event of death of the driver’s family member in an accident. The same extension of coverage also applies to drivers of rented vehicles, public vehicles or driving-learning vehicles.

Clarification on cases involving insurance write-off

Assuming you meet with an accident, and the cost of repairing your car exceeds 50 percent of the car’s current market value, the insurance company will have to write off the car and pay its market value to you. This is subject to the insurance company’s liability not exceeding AED 2 million.

To sum up, the new car insurance laws have brought in more extensive coverage and higher benefits for drivers in the country. But there are no free lunches, right? All the extra perks and additional benefits will come at a cost, and looks like you and I will be the ones to bear these costs after all!

[Related: New car insurance & car rental laws – What do they mean for you?]

Minimum and maximum premiums announced

The new tariff system for motor insurance policies was announced by the UAE Insurance Authority in late December. The newly prescribed minimum and maximum premiums have already come into effect from January 1, 2017.

Third-party Insurance Comprehensive Insurance
Minimum Premium (AED) Maximum Premium (AED) Minimum Premium (AED) Maximum Premium (%)
Saloon  750 – 1,300  1,300 – 2,100 1,300  5% of car value
4×4  1,000 – 1,200  1,750 – 2,150 2,000  7% of car value

* Minimum premium and maximum premium for third-party insurance ranges from 4-cylinder cars to 8+ cylinder cars.

So, what comes next? If you’re one of the unlucky ones who are currently paying a premium lower than the minimum premiums set by the Insurance Authority, be prepared to pay more when you go to renew your car insurance policy. But there’s still a lot that you can do to get the best deal and save on your next insurance premium…

Cut your car insurance costs with these simple tips…

The most obvious among all tips and tricks to save money on car insurance, is to maintain a good driving record. This will help you get a ‘no claims discount’ when you renew your policy and therefore, will bring down your premium.

You could also consider opting for a higher deductible or excess, which will lower your premium. But tread carefully on this one, it is a double-edged sword. Another option is to get rid of any policy add-ons that are least essential. For example, many credit cards in the UAE offer free roadside assistance, so if you own such a card you can ditch the add-on in the policy.

And last, but probably the most important of all, make sure you compare all your options before committing!

According to Ole-Petter Moen, Head of Insurance at

“The additional covers and new prices from insurance providers have already been updated on our website, in accordance with the new IA rules and regulations.”

Further, speaking about the changes he has observed, and how users can get the best deals on car insurance, he adds:

“We see a slight increase in prices across all insurance companies as expected due to the new regulations, but also significantly better coverage for all drivers. We would advise UAE residents to compare all options to find the best deal, and you can visit to choose from the widest selection of insurers.”