According to the analysts, 35.6% motorists in the UAE will have to pay an average of Dh 262 more for their full comprehensive car insurance with effect from January 1st. The insurance premium offered on the basis of this newly introduced tariff by UAE Insurance Authority will be minimum Dh 1,300 for saloons and Dh 2,000 for SUVs. Similarly, the maximum premium requires the owner of a saloon car to pay 5% of the car’s value and 7% for SUV.
With prices taking a hike, UAE drivers are advised to make rough estimates of their costs and savings before signing up for a policy. With that being said, this tariff comes with some potential benefits too. In case of an accident when policy holder is not at fault, the insurance would cover extra costs and also provide car rental costs (Dh 300 per day). A substitution car can also be provided instead, for 10 days.
Increase in the car insurance costs is done to cease the significant losses that the car insurance companies have been suffering from, in order to protect their market share. It is expected that the comprehensive car insurance market will grow by Dh 136 million in 2017 just with this new minimum rating system.