UAE Auto Insurance Norms Revised
Car insurance is an important document for anyone wishing to drive in Dubai. RTA and Dubai Police are very particular about documents such as driving license and car insurance.
We have previously discussed why the Insurance is needed. But in the recent time, there have been some revisions in the UAE auto insurance regulations. These insurance regulations may affect a lot of people, but as is with any rulings, will need to be complied with.
According to the revision of the auto insurance regulations, the premiums for both third party and comprehensive insurance policies have been increased by around 15% in Dubai.
For Comprehensive Insurance, the lower cap and the higher cap for the sedans and SUVs have been set. For the sedans, an amount of AED 1,300 has been set as the lower cap, while the upper cap is 5% of the total insured value. While for the SUVs, the lower cap for the insurance premium has been set at AED 2,000, and the upper limit is set to be 7% of the insured value.
For getting a comprehensive insurance, you can check out our guide on Comprehensive List of Insurance Companies in Dubai that can help you get the best insurance deals for your vehicle.
Third Party Insurance
The premiums of third party insurance too depend on the car type. For sedans, the minimum third party premium will start at AED 750 and will go up to a maximum of AED 2100. For SUVs, the premium for the third party insurance will start at AED 1,000 and will go up to AED 2,150.
Additionally, according to the latest UAE auto insurance regulations; to calculate the write-off value of a vehicle, deduct 20% of the insured value. This is different from the previous method of annual depreciation of 15% of the vehicle’s market rate.
Motorists Not Happy With the Move
The move hasn’t gone well with the motorists though, who feel that the hike is unjustified. There is a general conception that there are no additional benefits, and even if there are, they aren’t adequately conveyed or transferred to the customers.
A lot of motorists had the complaint of being charged a higher premium or of not being offered comprehensive plans despite qualifying for it. Further complaints were about companies devaluing vehicles at a higher percentage, and refusing insurance for any past claims.
Benefits in the Revised UAE Auto Insurance Regulations
The new regulations have some benefits from the customer’s point of view with the damage protection coverage and a mandatory provision for substitute vehicle in case of an accident. So, for the increased deduction rates and yearly premiums, the customers will get some additional benefits too.
The benefits given under the revised UAE auto insurance regulations seem to outweigh any or all increase in the premium according to industry experts. The benefits are as follows:
- Minimum coverage for third party damage has been increased exponentially. From the previous limit of AED 250,000, it has grown to AED 2 million. This means that in the case of any damage, expenses till AED 2 million will have to be covered by the insurance provider.
- Since there is a clause for mandatory emergency services in the insurance plan, these services can be availed by the consumers at no additional cost.
- There is also a provision for a replacement car, but according to the guidelines, it will be offered to the victim(the party who’s not at fault) of the accident. For example, if your car is hit by someone’s car, then Accordingly, their insurance provider will provide you with either a maximum of AED 300 per day for the period of 10 days or arrange a vehicle as a replacement for the same period.
If the fault is person’s own, then replacement vehicle will be provided only if the clause of extra coverage has been availed too.
- With these new regulations, the insuring terms are to be standardized. If the policy is comprehensive by its name, then it will have to offer comprehensive protection.
Some Likely Effects of the Revised Regulations
These are the most likely effects of the revised regulations:
- Since there were issues with customers not getting the required insurance due to companies not acting in their best interest or the lack of information, these regulations shall serve as a shield. The insurance provider will have to clear up all the norms and additionally provide the coverage as per what has been discussed.
- To avoid people who have had frequent interaction about their insurance, these regulations have set an upper limit on the premium. This will prevent excessive costs to motorists.
- The maximum cover for the property damage has been increased multifold; thus providing extended and improved liability coverage to the husbands, wives, children, and parents of a policyholder.
Overall, if carried out as per the regulations, the benefits may be good for the motorists on a long term basis. But what happens ahead, remains to be seen!