How is car insurance calculated? Top tips for better premiums in UAE


In 2018, the UAE reformed the car insurance sector to make it easier for consumers to access vehicle insurance without any hassles. Even though car owners have to pay higher premiums, the new laws have helped to regulate the vehicle insurance sector and offer more protection to consumers. Wecashanycar examines the top criteria that determine the cost that you will incur for your car premiums in the UAE.

How long have you been driving?

Premiums for younger drivers tend to be more expensive than those of older drivers.In the UAE, most accidents involve the younger drivers who tend to be speed junkies and less cautious. This therefore influences the cost of premiums for younger drivers as insurers categorize them under the high risk customers. If you have been driving for many years, it is assumed that you have more experience and are less likely to cause an accident.

In addition to the age, the payments that you will make towards your insurance policy are also determined by how long you have had your UAE driving permit. If you have had your driving license for a long time you will be required to pay less as compared to someone who has recently acquired their driving permit. Insurers know that new drivers are more likely to cause accidents in comparison to more experienced ones.

What car do you drive and what are its features?

A new car bought straight out of the showroom will be valued much more as compared to an older used car of similar make bought from Al AWir. This automatically raises the premiums because repairs and spare parts for brand new cars tend to be more expensive. In most cases, new car owners prefer comprehensive insurance despite its higher costs. This is highly recommended as it reduces the burden of repair costs in case of an accident.

Although premiums on a used car might be cheaper, insurers view high mileage cars as a risk because they are prone to breakdowns. This will therefore increase the premiums paid for such cars. Moreover, insurers also look at the safety features, car ratings to calculate your premiums. You will pay less premiums for a car that has more safety features and a higher rating.

You can also expect to pay much more if your car has special features. Super cars, sports cars and classic vehicles tend to attract higher premiums because they are high maintenance and come with costly repairs. Insurers also charge higher premiums for modified vehicles. You must always disclose any modifications to your insurer beforehand or else risk losing your cover in case of an accident.

What additional options do you want covered?

While your premiums will only cover the basics, you have the option of adding some more protective services at an extra cost. These can include:-

  1. GCC coverage

    This can be important if you frequently travel across the GCC region. Some countries such as Oman are strict about this and drivers who do not have GCC or international covers may be denied entry into the country.

  2. Roadside Assistance

    This important add-on cover can save you if you encounter a breakdown or run out of fuel. Regardless of where you are in the UAE, this extra service will give you easy access to a mechanic and towing service in case of emergencies. Be sure to inquire if your road assistance coverage is available 24 hours.

  3. Personal and Passenger Cover

    This offers extra protection for you as a driver and your passengers in case of injuries or fatalities during an accident.

  4. Personal Belongings Cover

    This add-on service indemnifies the valuables in your car such as laptops and mobile phones that might get damaged during an accident.

  5. Off-road Cover

    Most basic policies in the UAE do not offer repairs for off-road accidents. If you are the adventurous type that frequently engages in sand dune bashing, you ought to get extra coverage for your offroading activities.

Is your car maintained by an agency?

Additionally, most new car owners prefer to get repairs and maintenance from their car manufacturers or agencies.This ensures that they get expert services and authentic spare parts and products. Such services attract higher premiums because they cost much more compared to what regular mechanics charge.

How does your traffic record look like?

You can expect to pay higher premiums if you have a record of accidents and insurance claims. Moreover, drivers who have been involved in traffic violations are also considered high risk and therefore charged more. The good news is you can claim a bonus for zero claims and negotiate for better premiums if you have a clean driving record.

Now that you know how your car insurance is calculated, what can you do to get the best deal?

      • Buy a good car. Before buying a car, be sure to check the additional costs of maintaining it. This should include the insurance fees that you will pay for your car.
      • Conduct research on car insurers. There are so many insurers in the UAE and you ought to compare what each is willing to offer. You can use insurance comparison apps to find the best quotes.
      • Opt for higher excess. If you choose to pay the minimum premiums, your insurer will charge you more because they take on bigger risk. You should opt to increase your excess to get the best out of your cover.
      • Use your No-Claim Discount. Most drivers are not even aware that they can claim a discount for not having used their cover. If you have been driving for a year without making any claims, you can claim a discount from your insurer. No-claim discounts are transferable from one insurer to the next.
      • Maintain your car well. A well maintained car with low mileage can save you from high premiums. Wecashanycar has tips on car maintenance that can help you keep your car in prime condition.

2 comments on “How is car insurance calculated? Top tips for better premiums in UAE

  1. Hello There. I found your blog using msn. This is a really well written article. I will be sure to bookmark it and come back to read more of your useful information. Thanks for the post. I will definitely return.

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