Guide for Vehicle Insurance

Good insurance policies offer vehicle owners security and protection from liability in event of unforeseen accidents on the road. In the UAE, every vehicle running on the road must be insured and as per the RTA law, all vehicle owners must mandatorily own a basic third-party liability (TPL) insurance. In case of a mishap, the vehicle repair costs or damages to a third party will be paid by the insurance company. However, vehicle owners also have an option to select a more comprehensive vehicle insurance policy that offers coverage against loss or damage to their own vehicle, along with added covers based on their requirements and risk capacity.

If you have made up your mind to buy a brand-new car, you’d be eager to know how to select the right insurance plan and what aspects should it cover? Here’s a quick guide to everything you need to know when buying vehicle insurance in the UAE.

Mandate in UAE

Vehicle insurance in UAE is a must-have document for all vehicle owners in the UAE to avoid fines and cover your vehicles against unforeseen incidents such as accidental injuries, theft and damages to vehicle in case of collision.

There are two basic types of vehicle insurance policies offered in Dubai:

• Third-party Liability (TPL) – This insurance provides coverage for death or injuries to a third person in the event of an accident. It also offers coverage for damage to another person’s property or public property. However, TPL does not cover the expenses for damage to your own car.
• Comprehensive Insurance Policy- As the name suggests, this insurance policy offers a wider protection cover. Apart from covering the damage mentioned above, it covers the loss or damage to your own vehicle as well. Even though the policy costs more, it makes sense to opt for it, so that you don’t have to pay from your own pocket for your car’s repair costs.

Add-on insurance covers

Add on covers, as the name suggests, are designed to strengthen the coverage level of his/ her car. Besides the standard insurance cover, car owners have the leeway to choose from additional cover options available at extra premium:

– Roadside assistance or recovery breakdown: This cover provides you with a mechanic / towing service to the place of breakdown in UAE.
– GCC extension: If you take frequent road trips to neighbouring GCC nations, a wider geographical coverage is a good backup plan.
– Off-road cover: This cover is extended to cover loss or damage to the vehicle during off-road drives such as desert safari or adventure ride.
– Car rental: If your vehicle is in the workshop, this covers the cost of renting a car for easy commute during the repair period.
– Personal accident cover: This covers death or bodily injury to you or the vehicle passenger as a result of an accident.

Cost of vehicle insurance

The minimum annual cost for a comprehensive insurance policy for a private saloon car is fixed at Dh1,300. Whilst for SUV’s it’s set at AED 2,000 (which excludes optional covers like passenger accident benefit). For a four-wheeler, the TPL insurance cost ranges from Dh1,000 to Dh1,750. Generally, yearly car insurance costs around 1.25% to 3% of the car’s value. This can depend on many factors – age of driver, claims records, age of vehicle and its safety features.

Documents for obtaining insurance in UAE

• A copy of the driving license
• Vehicle registration certificate (Mulkiya) with model, size and manufacturing year of the vehicle
• Emirates ID
  *Documents vary case to case
  
  Insurance renewal and documents required:

Auto insurance policies in the UAE grant cover for a 13-month period. When you are close to the 12th month of your current policy, insurance company will send out ‘Policy Renewal’ notice to you. They offer a 1-month grace period for renewal; meaning you won’t be charged any fine during this time. It is now left to you to take a decision. Whether to continue with the same policy or go for an upgrade.

If you are planning to renew with the same company, then you can proceed as per that company’s policy. However, if you want to renew your insurance from another insurer, then you will need the following documents:

– A copy of UAE driving license
– A copy of Emirates ID
– Vehicle registration details
* Note: Traffic violation fines if any, should be paid on time before the renewal. Not only it will clear your name form outstanding fines but also accelerate your renewal process. For your convenience, now you can easily pay your dues online through the RTA website. You can also apply through their app on your phone.

Penalty:

The penalty levied for driving an uninsured vehicle is 500 AED in the UAE. Other than this 4 black points applied to your license and confiscation of the vehicle for 7 days.

We hope this easy-to-remember guide gave you an overarching view about vehicle insurance in the UAE and do keep these points in mind when buying insurance.

Looking to purchase a vehicle insurance policy?

Log onto insurancepolicy.ae to identify the best insurance plans with the desired level of protection for your vehicle.