Motorists in Dubai, and other parts of UAE, are paying 15% more on auto insurance premium than last year.
Premiums for both third party and comprehensive insurance for all categories of vehicles were increased after the UAE Insurance Authority revised the unified auto insurance regulations with effect from January 2017.
Apart from a hike in tariff, the amendment to the auto insurance regulations also introduced upper and lower limits to premiums, with the minimum comprehensive insurance premiums restricted to Dh1,300 for saloon cars and Dh2,000 for SUVs, while the maximum cap is at five per cent and seven per cent of the insured value of the vehicles for saloon cars and SUVs, respectively.
The minimum third party premium for a saloon car is Dh750, while the maximum is Dh2,100. For four-wheel drive vehicles, the minimum third party insurance is Dh1,000 and the maximum Dh2,150.
The insured value of the vehicle is decided on the 15 per cent annual depreciation of the vehicle’s market rate, however, according to the new rules, 20 per cent of the insured value will be deducted if the vehicle is written off.
The unified auto insurance regulations also increased damage protection coverage as well as making replacement car mandatory during the repair period, post accident.
The new policies will also include no additional levy of ambulance or medical evacuation fees, which were introduced in 2016.
Aside from the added cost, the new regulations do have some pretty substantial changes behind them. One of the most important is the new minimum cap that an insurer can put on third-party property damage, which has been increased from Dh250,000 to Dh2 million.
Apart from wider damage coverage, the new tariff includes add-ons that will cover the costs of emergency services in the event of an accident.
However, the replacement cars for 10 days or Dh300 per day to cover the cost of car rental will be available only to those who are not at fault.
It means that those who aren’t at fault do not lose out financially if someone damages their vehicle. Now, if someone hits you and damages your car, their insurance policy will either arrange you a replacement car, or else pay you to rent a car for up to 10 days. This means that you are not in danger of being stranded without transport as a result of someone else’s mistake.
For those who are at fault, they will get a replacement car only if they have purchased additional coverage.
Another benefit of the regulations is standardization of the wordings of policies, that brings in minimum levels of cover.
The regulator has stepped in to ensure that when you buy a policy, you can be more comfortable that it is fit for the purpose. It should no longer be the case that consumers buy policies that are “comprehensive” in name but could in fact leave consumers underinsured.
The replacement car rule is available in both comprehensive and third party insurance.
It is important to note that the new regulations apply to policies sold on or after January 1, 2017.