Will your car insurance premium go up in 2017?
January 23, 2017 11:41 am
Car insurance. (Image: Alamy)
2016 was the year of many significant developments in the UAE car insurance sector. First came the introduction of a unified vehicle insurance system in September, which was followed by the issuance of revised insurance tariffs by the UAE Insurance Authority in December. If you’re still trying to make sense of how these changes will impact you, here’s a simple explanation from the Souqalmal.com team.
If you missed the big news about changes in car insurance laws in the UAE, here’s a quick recap.
Significantly higher insurance coverage
Car insurance providers have been directed to increase coverage for claims in the event of an accident resulting in damage to property from AED 250,000 to AED 2 million. That’s a whopping eight times higher than before!
(Everything you need to know about car insurance)
Compensation for a replacement car
It will now be mandatory for insurers to compensate you for the cost of a replacement rental car after an accident. Under this provision, you can claim compensation of up to AED 300 per day, for a maximum of 10 days.
Extension of liability coverage
Under the unified motor insurance law, liability coverage has been extended to cover the driver’s immediate family members – spouse, children and parents – in case of an accident. The insurer is now liable to pay AED 200,000 in case of death of a family member of the insured driver. Liability coverage has been similarly extended for drivers of rented vehicles, driving-learning vehicles, or public vehicles.
New provision for insurance write-off cases
The insurer is liable to repair the damaged car after an accident, but if the cost of repair exceeds 50 percent of the car’s market value, the insurer will pay the market value of the car to you, provided the company’s liability is not more than AED 2 million.
To summarize, now there’s higher coverage and greater benefits for all! – So, this is great news right? But wait a minute, won’t all these additions and extras drive up the cost of insuring your car?
New tariff system for vehicle insurance issued
With the introduction of a new vehicle insurance tariff system, recently announced by the UAE Insurance Authority and already in effect from January 1, 2017, car insurance costs look set to rise this year.
|Third-party insurance||Comprehensive insurance|
|Minimum premium||Maximum premium||Minimum premium||Maximum premium|
|Saloon||AED 750 – AED 1,300*||AED 1,300 – AED 2,100*||AED 1,300||5% of vehicle’s value|
|4×4||AED 1,000 – AED 1,200*||AED 1,750 – AED 2,150*||AED 2,000||7% of vehicle’s value|
* Minimum and maximum premiums for third-party insurance shown here range from 4 cylinder vehicles to 8+ cylinder vehicles.
So, what now? With the revised car insurance tariffs, there’s a big chance that you’ll be paying more to renew your car insurance policy, especially if your last premium was lower than the newly set minimum premium for your class of policy.
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What can you do to save on car insurance premiums?
If you have a good driving record, you have less reason to worry. You can expect to save on your insurance premium, thanks to the no claims discount. You can also opt for a higher excess or deductible when signing up for your policy, which will bring down your premium. But it’s a double-edged sword so be careful.
Further, any policy add-ons are also expected to drive up your insurance premium, so be picky when choosing these. Also buying a more economical car would automatically lower your premium.
And finally, don’t forget to compare before you commit. At Souqalmal.com, you can compare and choose from the largest selection of insurance providers in the UAE. That’s not all! You can get a quote within 60 seconds and your policy within an hour.
Source: Press Release