Introduction
Car insurance is a crucial aspect of owning a car in Dubai that ensures the financial protection of a car and its passengers against unforeseen events, including on-road and roadside accidents. The coverage of car insurance in collisions directly depends on the type of car insurance you purchase. However, navigating the world of insurance can be challenging for many car owners; thus, we provide a comprehensive guide to help you understand the different types of car insurance in Dubai, their coverage, legal requirements, and tips to choose the best insurance based on your needs.
Car insurance in Dubai
Like any other Emirates in the UAE, car insurance is mandatory in Dubai. The Road and Transport Authority (RTA) requires all vehicle owners to provide car insurance according to the laws and regulations ordered by the authorities. Driving without insurance can result in a penalty of AED 500, four black points, a seven-day vehicle retention period, and suspension of driver’s license.
Car insurance in Dubai is valid for 12 months and Dubai insurance companies only allow annual payments. The car insurance policy in Dubai covers a vehicle against damage in case of on-road accidents and natural disasters. Car owners need to notice that the total insurance coverage will be given in accordance with the policy and the company selected for car insurance in Dubai.
It is also an obligation to have car insurance in case the car owner wishes to sell the vehicle or purchase a new car.
Types Of Car Insurance In Dubai
Car accidents can happen anytime, however, owning insurance can make the problem less daunting. There are two basic types of car insurance policies available in Dubai. Third-party Liability insurance is obligatory in any case of accident; however, many car owners in Dubai choose to purchase a more comprehensive insurance policy, which can be much more expensive. In the following, we will discuss different types of car insurance in Dubai and compare their coverage and financial support.
Third-Party Liability car insurance (TPL)
According to the UAE RTA law, it is obligatory for vehicle owners to have third-party liability car insurance. Third-party liability car insurance is also the basic form of auto insurance in Dubai since it covers any liability caused to the third party such as bodily injuries or property damage.
Many people opt for third-party insurance coverage as it is the cheapest option. However, it is worth noting that if your vehicle suffers damage because of your fault in an accident, there will be no coverage for the repair work. The insurance company only offers to pay the third-party damage caused by your fault. Thus, in the case of a collision, you will receive basic coverage that is lower in comparison to comprehensive car insurance.
According to RTA regulations, vehicle owners whose cars are 7 years or older can only opt for a third-party liability car insurance policy.
Comprehensive car insurance (CI)
Comprehensive insurance coverage is optional on your car insurance policy in Dubai. A comprehensive car insurance policy offers to provide broader protection, meaning that the policy covers not only third-party claims but also all damage to your own vehicle in case of an accident. Moreover, the comprehensive car insurance policy also protects you from other damage and loss, including burglary, vandalism, and theft along with car repair and replacement costs, depending on the coverage you pay for.
A comprehensive insurance policy also protects you from the damage caused by fire explosions, self-ignition, riots and other malicious acts. The full insurance coverage of your car may make comprehensive insurance an expensive, though valuable, option in the crowded city of Dubai.
Please note that if you choose to lease or finance your car, lenders may require you to purchase comprehensive coverage until the loan is paid off. You should also note that comprehensive insurance can be deductible, meaning that car owners have to pay a predetermined amount at the time of a non-recoverable claim due to an incident such as a car accident or natural disaster. Many insurance companies ask to pay the deductibles immediately to begin the claim process.
Car insurance add-ons
Car owners in Dubai can also ask for additional coverage with their insurance policy. Here are the most popular options to ask for:
- Theft and fire: Owning any insurance policies, you can always ask for protection against fire, acts of nature, theft, or vandalism.
- Roadside assistance: To get protection and support in case of roadside breakdowns, including towing, tire replacement, and battery jump-starts, you may ask for roadside assistance regardless of owning a TPL or CI policy.
- Gulf Cooperation Council (GCC) coverage: This service offers coverage throughout the GCC member countries (i.e., Bahrain, Kuwait, Oman, Qatar, and Saudi Arabia). The service can be added to both TPL and CI policies.
- Personal effects coverage: This service offers to protect your valuable belongings in the car against theft or damage. It is available for TPL and CI policies.
- Replacement rental car: The service provides you with the chance to rent a car for free or at a reduced rate if your own car needs to remain in the workshop for longer than a day. Only CI policyholders can use the service.
- Off-road coverage: Although almost all CI providers offer off-road coverage, you can ask for the service to protect your car against damage sustained by driving off-road (e.g. in case of dune-bashing).
Legal Requirements For Car Insurance In Dubai
It is mandatory to have an insurance policy, at least third-party liability insurance, to drive a vehicle in Dubai. This ensures to cover any damage or injury caused to others in a car collision. Notice that not having the required insurance can lead to heavy fines, vehicle impoundment or several other legal consequences.
You can purchase a car insurance policy online or attend insurance offices in person and check your preferred insurance policy. The requirements for issuing car insurance may vary slightly, but the following documents are generally required:
- Valid driver’s license in the UAE
- Valid passport or Emirates ID
- Valid visa if you are an international
- Car registration details
Once your identity and car registration documents are approved, you will receive your policy number and insurance card. Note that you should always keep your insurance card with you while driving the car.
Tips For Getting The Best Rates On Car Insurance In Dubai
If you aim to get the best car insurance coverage, it is essential to understand all the key elements related to your auto insurance costs. Here are some tips for getting the best rates on car insurance in Dubai.
Consider various options
There is a large number of car insurance providers in Dubai which can make it difficult to choose the right option. You need to compare their policies, the coverage rate they provide, and choose a car insurance policy that best suits your needs and budget.
Pay for the essential add-ons
Every car insurance policy offers various extras, and there are some benefits over the basics. While checking add-ons, see what you really need! Some extras can be attractive but you don’t need all of them! Also, notice that car insurance companies usually charge more for the add-ons that may make your insurance premium even more expensive.
Driver history
The car insurance costs could also be connected to the driver’s age and history. The premium could be higher for drivers under 25 years old. Unlike experienced drivers, a beginner or a driver with a poor driving record usually has to pay higher insurance premiums. Simply put, a driver over 25 years old with a clean record and no past insurance claims gets the best car insurance rates.
The “no claim” bonuses
The “no-claim” bonus rule refers to the case that the insurance holder has not made any specific claims in the previous years; thus, the insurer usually offers an additional discount on the car insurance premium. One of the best ways to save money on car insurance is to get the no-claim bonus.
Improve deductible
A deductible is a fixed amount paid on an insurance claim to get a car repaired. Your car insurance company usually covers any car repair, though the driver should select the proportion they look for. Notice that higher deductibles result in lower cost of car insurance. Always check all the details associated with the coverage when filing an insurance claim.
Review insurance coverage before renewing it
If you wish to allow your car insurance coverage to renew automatically, consider that reviewing details before renewing your car insurance can help you save money on that. You may require a new insurance premium based on your current or future requirements.
Conclusion
Understanding car insurance in Dubai ensures that you get the best protection for your vehicle and yourself. By considering your coverage needs, comparing premiums, and choosing a reliable insurer, you can secure the best policy for your needs.
FAQ
The minimum legal requirement in Dubai is having third-party car insurance. It is usually an affordable option for vehicle owners as it covers the basics and only covers the damages caused to the other vehicle by the insured vehicle. However, comprehensive car insurance in Dubai offers coverage to the insured party as well as the claimant.
If your current insurance policy is valid for more than 9 months, you can ask your insurance company to provide a transfer option to a new car. You can also apply for a refund in case they don’t transfer it to a new owner.
Yearly car insurance in Dubai usually costs around 1.25% to 3% of the car’s value. Other factors that can influence the cost of car insurance in Dubai are the number of previous insurance claims, the age of the driver, and the driving license age.
The car insurance in Dubai lasts for 12 months since the registration. However, you will be provided with a 30-day grace period to renew the car insurance so that you will not be charged any fine or penalty during the grace period.
Driving a car without insurance can result in AED 500 fine and 4 black points. Besides, your car can also be confiscated for 7 days.
Car insurance in Dubai is usually paid once or twice a year depending on the insurer and their terms. The car insurance premium payment is negotiable with the insurance company you choose.
Under the law in Dubai, it is obligatory to own a car insurance while driving a vehicle. The Third Party Liability Insurance is the basic and the minimum insurance cover required in Dubai to cover bodily injuries and property damage to the third party in the case of a car accident.
