Find out which coverage is most suitable for you and your vehicle with our complete guide to the 5 different types of car insurance policies in Dubai
23 December 2019| Last updated on 23 December 2019
Getting car insurance for your vehicle is mandatory in Dubai, here's what you need to know before securing coverage
After you finally bought a car in Dubai, the last thing you'd want is to lose your precious savings because of an unforeseen event. Car insurance can financially protect owners in regards to physical damages to the vehicle, such as from accidents, collisions, theft, vandalism, damage from nature, and more.
With so many different types of car insurance and policies available in Dubai, getting the right one that fits your budget and need requires an informed decision.
SEE ALSO: Insurance Types Available in the UAE
Why do I need car insurance in Dubai?
On top of car insurance financially protecting you and your vehicle in case of damages from an accident or natural damages (rain, lightning, sandstorms, etc.), it is mandatory for all owners of registered cars in Dubai to get car insurance, as per the UAE RTA law.
What type of car insurance in Dubai should I go for?
There are 5 types of car insurance policies offered in Dubai. Which one you will pick depends on the following:
- Your personal requirements - to what extent do you want the car insurance to cover.
- Your probability of risk - if you're the cautious type who wants to be prepared for anything, or if you want to get the bare minimum because you believe the risk probability will be low.
This guide to Dubai car insurance will help you understand the types available so you can get the most protection for you and your motor, according to your answers for the two above.
Here are the 5 types of car insurance in Dubai and what each of them entails.
1. Third Party Liability Insurance
The Third Party Liability Insurance offers the minimum amount of car insurance required as per the UAE law. This policy protects the vehicle owner against claims from others whose own vehicle may have been damaged by your car, as well as any injury or death caused to the other person because of your car.
However, this type of insurance is limited as any damages done to your own vehicle or injuries will not be covered.
2. Third Party Liability Insurance with Theft and Fire Coverage
This will include everything in the basic Third Party Liability Insurance but will cost more as it will add on protection for your vehicle in the event of theft or fire damages to your car.
3. Basic Comprehensive Policy
This is the basic Comprehensive Policy protection plan for your car and will cover you against third party damage claims of damage and injury, as well as your own. The damages or loss to yours and a third party's vehicle include accidental collisions, natural damages, theft, fire, external explosions, self-igniting, and should a third party individual or group commit intended malicious activities to your car (e.g, vandalism).
Insurance companies in Dubai offering a Basic Comprehensive Policy are legally obliged to provide this type of car insurance at a price that is 3%-5% of your vehicle's value.
4. Comprehensive Policy
The Comprehensive Policy plan comes at a higher price compared to the previous three as it has the added benefit of protecting the owner from damage caused to third party vehicles and damages made to your car - making better value for your money. This is inclusive of burglary, fire, damages from nature (rain and lightning) and accidental collisions. It may also include damages sustained from hitting an animal or glass
Note that insurance providers are obliged to charge a maximum amount of 5% of the car value. Comprehensive car insurance in Dubai is not available to cars that are more than 7 years old.
Here are some of the add-ons you can choose to select for your insurance plan, for an additional cost:
- Fire (accidental or act of nature)
- Burglary and vandalism (theft of car parts or the car, and malicious acts
- Roadside assistance (vehicle towing, flat tires, emergency gas delivery, mechanical repairs, battery boost, accidental lockouts from your car)
- Bodily injury or death (to a third party person or their property/vehicle)
- Loss of personal items (personal belongings that were damaged/lost while in the car due to an accident, fire, or theft)
5. Premium Comprehensive Policy
The Premium Comprehensive Policy is the most expensive car insurance available in Dubai and it is only available to selected clients if they pay 1% - 2% more.
This type of insurance protects the car owner against claims of third parties if their vehicle was damaged by you, and it also covered any damages and loss to your own car.
Insurance providers have several assessment criteria for this premium car insurance package:
- Age: Female and male drivers who are 25 years old and above are not subjected to higher insurance rates, as they are not regarded as risky drivers. However, drivers under 25 years old may be subjected to a higher insurance rate.
- Car: The brand, model, and make of the car will influence the insurance rate. Cars that are over 5 years old, as well as sports and luxury cars, are regarded as more expensive and will be difficult to get insured. Cars that have a history of or a reputation to get into accidents will be very expensive to insure.
- Insurance interest rate: A balanced interest rate will decrease over time, and fixed interest rates will remain consistent throughout the period of your car insurance policy.