Various Insurance Options in the UAE and their benefits

The pandemic is a reminder of how tragedies can strike at any moment and it’s always better to be ‘safe than sorry’ by purchasing a protective cover for unexpected events. Insured individuals sail better in troubled waters than those who aren’t, as insurance in UAE acts as a safety net when something goes haywire It allows the insured to transfer the risk of financial losses to the insurer and gain compensation.

It’s in the best interest to be equipped with the right insurance policies so that you’re well prepared. Moreover, the pandemic surged a demand for innovative and customized insurance solutions with added coverage options.

In this article, we brief you on the various types of insurance in the UAE and respective benefits.

UAE insurance market

A well-developed insurance sector with a mix of local and intershield national insurance providers, the UAE insurance market is led by two compulsory classes – health and motor. According to RTA Law, motor insurance is compulsory for every vehicle owner in UAE. Dubai and Abu Dhabi have made health insurance mandatory, ensuring residents have access to top-quality healthcare in the region. Though home, travel and life insurance are not mandates, it’s prudent to buy them so that one’s prepared for the unexpected.

Compulsory insurance classes

Motor

As per UAE law, it is mandatory for every vehicle owner to have a third-party liability (TPL) insurance cover, the most basic coverage against claims made by the third party for injuries, damage to themselves or their property. However, this doesn’t include the cost of own vehicle damage. Vehicle owners have an option to buy comprehensive insurance that offers higher protection for their own car. The minimum cost of TPL insurance in UAE ranges from AED 1000 to AED 1750 depending on your car model. (Generally, yearly car insurance cost around 1.25% to 3% of the car’s value.)

Benefits

– TPL insurance indemnifies drivers against litigations arising from collisions on road and compensates the damage to third-party vehicles including personal injuries.
– Comprehensive insurance protects your own vehicle against damage, theft, vandalism or weather-related accidents. In addition, coverage can be extended for off-road incidents and roadside assistance.

Health

Dubai and Abu Dhabi residents need to own mandatory health insurance in UAE with basic coverage limit. In Dubai, employers must arrange health insurance for their employees, while dependent insurance is on the onus of their visa sponsor. In Abu Dhabi, employers are legally obligated to cover employees and their family (spouse and up to 3 children below 18 years) under medical insurance. Though the law doesn’t obligate health insurance to employees or dependents in other emirates, it can be purchased voluntarily.

Emiratis have access to government insurance programs while ex-pats rely on corporate schemes agreed with their employers, with coverage extent determined as per their salary/designation. The medical insurance cost ranges from 750 AED – 1450 AED annually.

Benefits

– The unpredictable nature of medical emergencies makes health insurance a necessity for people of all ages and walks of life. In case you fall ill or encounter an accident, insurance turns a life saver by covering the medical expenses (consultations, surgical expenses, lab tests, in-patient care and medicines).
– You get peace of mind knowing you’re covered for the best treatment and can totally focus on your rest and recovery. (Note- Standard health plans don’t include specialist services – dental or eye care. Added coverage can be availed of an extra premium.)

Optional insurances

Travel

Being strategically located, the UAE is a stop-over travel hub with superlative international connectivity to the rest of the world. Though travel insurance isn’t compulsory, owning one before you fly is handy to avoid out-of-pocket expenses in foreign land. Few countries have mandated travel insurance for tourists while applying for visit visas.

Benefits

– Good plans shields you against unforeseen expenses on international trips, such as medical expenses, lost/stolen baggage and third-party liabilities.
– In case of unavoidable missed or delayed flights, you get cover for extra accommodation and travel costs. The great news is that some insurance plans now even include COVID-19-related expenses too.

Home

Home insurance in UAE is available for both the building and its contents. Because this is optional insurance, you can preselect coverage options. Building insurance covers the damage caused by natural calamities or vandalism. With separate plans available for villas and apartments, it’s advised to get your property insured while renting or leasing it. Costs start from AED 400 and vary depending on property size, value and location.

Benefits

– Home insurance covers structural repairs caused by fire, floods, storms, earthquakes or malicious intent while content cover protects your personal belongings against damage/heft. This includes loss or damage to household goods like furniture, appliances, portable equipment.
– Homeowners gain security knowing property damages will be indemnified. The best part is the insurance is inexpensive compared to refurbishment costs if the worst happens.

Life

Owning life insurance is a financial priority against ultimate loss ‘death’ and is critical in situations when you have a family relying on your income. Upon your demise, a lump-sum amount (death benefit) is paid to your beneficiary. Some additional covers even guard you against critical disability or illness with income benefits. However, premiums depend on several factors, including your lifestyle and age when taking the policy.

Benefits

– As illness or death can knock anytime, supplemental policy income acts as a safety net for your family to fund essential expenses and helps pay off pending bills or loans.
– A life policy assures financial protection and security to your loved ones even after your passing away and helps steer them out of testing times.

We hope you got an overarching overview of various kinds of insurance.

Before applying for insurance in the UAE, we recommend you gain expert advice from specialists to select the right plan by comparing quotes with coverage offered. Reach out to our insurance advisors to find out how insurance best serves your needs.