07/01/2017
New UAE Car Insurance Rules to go into Effect on Jan 1st 2017
December 25, 2016 Wim Torfs Abu Dhabi, Dubai, Sharjah
New UAE car insurance rules
Car Insurance Featured Living in Abu Dhabi
The Insurance Authority has approved a set of new rules for car insurance policies in the UAE that will become effective on January 1st 2017. But how will these rules affect you when you buy your next car insurance policy in Dubai, Abu Dhabi or the Northern Emirates? We have come up with a quick summary to explain the main points:
More coverage for drivers not at fault: The Insurance Authority is imposing stricter rules on what exactly is covered with third party liability (TPL) insurance. If you’re not at fault, you will now get a replacement car in case of an accident irrespective of if your own insurance policy provides this benefit or not. Also, if the chassis of your car has been damaged and the damaged part can’t be replaced, the insurer is no longer allowed to repair the car and will have to declare it a total loss. This means that you will either get a new car or be paid the market value of your car as compensation since a repair is considered to be too risky for such cases. These rules apply to all motor policies issued in the UAE.
More benefits for your family: The TPL benefit will be extended so that it covers car accidents involving your close family members (husband, wives, children or parents). Previously your relatives were only covered under the passenger accident benefit which often came at an extra cost for car insurance policies.
New excess rules: The excess is the amount which you have to bear before the insurer pays a claim. New rules for maximum excess mean that many customer will see a lower excess on their car insurance policies compared to last year. Still, drivers will have the right to select a higher voluntary excess and be quoted a lower premium in return.
Pick and choose: Previously customers could only select between third party liability (TPL) and comprehensive car insurance policies. A comprehensive policy is a bundle of covers including TPL and covers for “own damage” meaning any damage to your own car. With the new rules it will be possible to get separate quotes for a TPL and an own damage cover – and you will be able to buy these covers from different insurance companies.
Cost of Insurance: As the scope of mandatory insurance benefits has been widened, the cost of motor insurance in the UAE is expected to increase noticeably in 2017. As before, comparing quotes pays off as insurance companies still have the freedom of defining the exact price for each driver profile. The new regulation nevertheless also means that UAE insurers cannot charge additional policy fees such as the ambulance fees currently charged in Dubai or the EVG fees charged in Abu Dhabi and Sharjah.
