Press "Enter" to skip to content

Factors That Affect the Cost of Car Insurance in UAE

After months of consideration, you’ve finally made one of the biggest financial decisions of your life and purchased a car. Your eagerness knows no bounds when it comes to driving your prized-possession. You take off at full throttle to zip through the iconic roads of Dubai. It is as good as it gets being behind the wheel. Buying the dream car that induces a sense of awe is no mean feat, but there’s more to consider beyond indulgence. Before you get down to test the potential of the engine, ensure your machine is covered under car insurance in UAE and certified with the Road Transport Authority (RTA).  Don’t forget the cost of car insurance.

What is Car Insurance?

Car keys
Photo by Negative Space from Pexels

Car Insurance binds you in a contract with the insurance company. Basically, it safeguards the policyholder against a financial crisis in the event of an accident, malicious damage, theft, etc. To get extensive coverage for the loss, the policyholder has to pay a yearly premium. In case of a covered event, the policyholder is entitled to make the most of his insurance plan. As per the UAE law, every vehicle owner must have vehicle insurance coverage for his vehicle driving on the road.

Note- In case the policyholder didn’t file an insurance claim in a policy year, the insurance provider rewards him in the form of No Claim Bonus. The NCB ranges between 20%-50% of the premium amount. 

Car Insurance Premium

Often, insurance buyers feel that the cost of car insurance premiums is on the higher side. While the rising insurance premium is a valid concern, most of the car insurance plans provide the full value of money. Insurance buyers looking for maximum insurance benefits at minimum insurance premium need to know that various reasons affect car insurance premiums such as the insured declared value of the car, make and model of the car, modifications (if any), etc. 

We have highlighted the most common reasons for an increase in the cost of car insurance rates below.

Dodgy Driving Habits

Traffic police
Image by F. Muhammad from Pixabay

A person’s driving record stained with fines and black points due to traffic violations speaks volumes about their carelessness and casual attitude. It is also one of the many reasons behind the rising cost of the insurance premium. An unimpressive driving record lacks credibility in the eyes of the insurer. The insurance company considers such a case as the absolute liability. An unreliable driver is an accident-prone individual who exposes his/her car at a higher risk. That is why the insurance company charges a higher insurance premium from them.

There’s no shortage of training programs run by the Dubai and Abu Dhabi police officials that are designed to instill the feeling of safe and disciplined driving in the minds of the young motorists. This initiative may be worth pursuing if you want to improve your driving record and cut down on the premium for car insurance in UAE. 

Demographic Factors

Car accident
Image by PublicDomainPictures from Pixabay

Some people have a higher risk of getting involved in a mishap as compared to the others. Insurance companies never fail to take note of historical data of accidents based on demographics. Based on that data, they calculate the insurance premium. Undoubtedly, a policyholder’s age, gender, and marital status can affect the cost of the car insurance premium. For obvious reasons, a young insurance buyer who has just got his driving license will have to pay a higher insurance premium than someone who is in his fifties.

Selection of the Type of Policy

Sometimes, insurance buyers on the lookout for a cost-effective plan may end up paying too much if they do not choose their plans carefully. Interestingly, Dubai Insurance providers offer well-thought-out plans that fulfill various insurance needs of the vehicle buyers. Another important point worth mentioning is deductible. Come to think of it –if you have a policy with a zero deductible, then you’ll be liable for a higher premium, and vice versa. However, it takes alertness and shrewdness on your part to pinpoint the redundant parts of your car insurance policy. 

Let’s say that if your policy includes the roadside assistance cover from an authorized dealer, there is no point opting for roadside assistance feature. Moreover, you can skip add-on benefits that hold no significance, such as Oman extension, if you have no intentions to travel beyond the UAE borders. 

The Bottom Line

There’s no point denying the facts that will probably affect you in the long run. Car insurance in Dubai attracts an insurance premium based on various factors. First off, the make and model of your car helps the insurer to estimate beforehand the degree of risks associated with it. Secondly, the age of insurance buyers also affects the insurance premium. Insurance experts advise comparing various car insurance plans options before settling on one. 

Informed policy buyers would never buy insurance plans in a jiffy. Thus, their decisions are backed by a rational approach.

Getting multiple quotes and comparing policy features across various plans will help you bag the best-in-class insurance policy.

Featured Image by Free-Photos from Pixabay