Most states require the driver to carry proof of insurance at all times. The penalties of driving without insurance are severe, resulting in high penalties, license suspensions and in some instances, you will be sentenced to jail also.
Although car insurance premiums are an unwelcomed financial burden for the motorist in spite of the rising cost of living and fuel prices, yet it gives you protection during accidents or thefts.
Motorists often select the insurance based on the cost of premiums without even realizing what type of premiums will benefit them most.
Let us look at some of the best motor insurance Dubai coverages, and a motorist should worth considering….
Different types of Car Insurance Policy in Dubai
The first step after buying the car is to register and insure with Dubai insurance. Before insuring, you should know whether you are using the right type of coverage for your car. To decide the best coverage plans, you need to know about the different types of motor insurance coverage in Dubai
- Third Party Liability Insurance – Third Party Liability Insurance is mandatory by law as per the Dubai government. This is the most basic form of motor insurance Dubai and will not cover for any of your expenses. For example, if you get into an accident that was at your fault, the third party insurance will cover for the damages caused to the third party, but you need to take care of your damages. However one of the main advantages of this insurance coverage is, it protects you from legal liability made by the third party or the injured driver.
- Third Party Liability Insurance with Theft and Fire Coverage – This policy is the same as the third party liability insurance. However, in addition to the previous policy, the motor insurance will cover for the damage to your car due to theft, the act of vandalism or fire.
- Basic Comprehensive policy – A comprehensive policy is a complete package to your car, an expensive alternative to the third party liability insurance. It gives the maximum protection for your vehicle. This covers damages caused due to fire, theft, vandalism, explosion, accidental collisions, etc.; perhaps, it offers a better value for your money you spend. However, there are few eligibility criteria for applying the comprehensive policy
- The drivers should be above 22 years of age
- Vehicles should be less than seven years old from the date of registration
- Drivers should have a minimum of 1-year valid driving experience in the country. However, for new customers, they should have 1-year driving experience in their home country
- Fully or Advanced Comprehensive Policy – This is the highest level of protection you can get for your car. With the comprehensive motor insurance Dubai, you can claim for the accident from the insurer, though it is at your fault. The repair cost after accidents are humongous therefore to have an added level of protection, and greater peace of mind, fully comprehensive policies are highly recommended. You need not spend from your pocket during instances of accidents.
- Premium Comprehensive Policy with added features – Premium comprehensive policy covers for both the third party as well as the damages to your car. Their rates are pretty expensive due to add-on features to the existing policies. In addition to the above claims, your policy will also cover for the repairs, replacement of parts, breakdown cover and free insurance in GCC countries. For people who own luxury cars, for maintenance and repair, this policy is the most suitable and wonderful.
When purchasing a new vehicle, buyers often forget to estimate car insurance costs. The motor insurance Dubai cost varies depending on the vehicle. A basic model vehicle will have nominal insurance premiums whereas owners of the luxury cars should be prepared to pay higher premiums.
The premiums also vary depending on Dubai insurance companies. There are few factors that determine the cost of car insurance in Dubai
Top Factors that Affecting the Car insurance Rates
- Cost of the car – Among the different factors, one of the most obvious factors is the car prices. There is a common perception that owning a low-value car will help you get a better insurance premium. Although this works out for certain cars, not all cars come under this option.
Cars which are priced more than three hundred thousand AED would be required to pay an average of 2.75 percent of motor insurance Dubai. However for the low priced car having prices lesser than one hundred thousand dollars would be required to pay an average of 3.25 percent of the car price.
- Age of the policyholder – Certain ages pay less motor insurance in Dubai in comparison to others. Age is one of the important factors in determining auto insurance rates in the country. People who are in the higher risk age brackets would likely pay higher premiums.
People who are under 25 tend to pay higher premiums because this age category is regarded as higher risks of causing accidents. Although the age for getting a driver’s license is 18, yet for the next nine years, they need to pay higher car insurance premiums. However, when they have clean driving history, the premiums rate might likely reduce as they age.
- Nature and Brand of the vehicle – The make and model of the car certainly impacts the car insurance premium. What car company manufactures your car, whether it is a fancier model, is it a foreign luxury car or an imported car, these factors play a major role in deciding the insurance rates.
Furthermore, to the cost of the car, the Dubai insurance should know the relative cost of the repair because your comprehensive premium insurance will cover for the repair and replacement cost. If your vehicle is damaged in an accident, your insurer should know how much will be the expenses to cover your damages. Some insurance companies offer cash value coverage whereas some offer actual replacement cover.
In addition, some makes and models require more expensive parts or repair technicians to fix the damages and make the replacements. So based on these aspects, the insurance cost would be determined. The base model with four doors is often the smartest decision to purchase the car with best prices and also pay affordable premiums.
- The Place you live – Territory is one of the criteria in determining the insurance cost in certain countries. The riskier you appear, the more insurance you will pay. When you live or drive in metro areas where the rates of accidents are significantly higher, you will likely pay higher premiums than people living in rural areas. However, this factor is not applicable to many countries like UAE.
- Safety Rating – People think that cars with better safety ratings would require lower insurance. Perhaps not!
The motor insurance Dubai rates don’t have much impact on car safety ratings rather on driver’s safety ratings. If the driver maintains a good driving record without any severity of your recent driving violations and collisions, his insurance premium tends to reduce gradually with experience.
Car insurance companies often conduct safety rating test to ensure how well the vehicle can respond during accidents and how much extent can it avoid an accident. They can convince the customers saying, that it could have a significant impact in reducing your car insurance; however, the insurance companies tend to put more emphasis on the driver’s performance. If the driver rating is bad though he is driving the best-rated safety vehicle, yet he needs to pay higher premiums due to his bad driving records. Drivers who have had several accidents or traffic violations and making multiple claims are too risky to insure and probably tend to have higher premium rates.
- Benefits and Bonuses – In many of the states in UAE, most drivers insure their vehicle based on the basic third party liability which is basically an average of one hundred and twenty AED, however when they want to add secondary driver, then their insurance claim likely to get increased to 150 AED for both the drivers, apparently an addition of 30 AED to the secondary driver.
In addition, motor insurance Dubai offers no claim bonus to the customers. Perhaps it is a feature of the car insurance companies and one of the best plans for the policyholders. By protecting the no-claim bonus, the policyholder can reduce the insurance premium by a certain amount. But what is a no claim bonus?
No claim bonus also known as no claim discount is a reward offered by the Dubai insurance if the policyholder agreed that he will not claim for insurance for a year. The amount varies year after year, and if you don’t claim until five years, then you can expect a significant reduction in the insurance premium cost.
The Bottom Line
With the help of the above-said information, you can make a rough estimate of the insurance cost you would be paying for your new vehicle. When you find a wide variation with the insurance companies, you can negotiate for better prices.