The Insurance Authority revised the UAE auto insurance regulations and implemented them in January this year. According to the revision, premiums on both comprehensive and third party insurance policies have been increased by 15% in Dubai. Lower cap for comprehensive insurance plans was set at Dh1,300 for sedans and Dh2,000 for SUVs, whereas upper caps are set at 5% and 7% of insured value, for each vehicle type respectively.
Third party insurance premiums have also been increased with the same percentage. The minimum third party premium starts at Dh750 for sedans and goes up to Dh2,100, whereas for SUVs, it starts at Dh1,000 and goes up to Dh2,150. Also, according to the revised UAE auto insurance regulations, the write-off value of a vehicle will be calculated by deducting 20% of the insured value, instead of 15% annual depreciation of the vehicle’s market rate.
Apart from increasing yearly premiums and deduction rates, coverage for damage protection has also been raised along with mandatory provision of substitute vehicle to insurance holder in case of an accident, to ensure that motorists get extra benefit for added premiums.
Motorist’s Decry in the UAE
However, motorists in the UAE feel that the hike in premiums by the UAE Insurance Authority do not bring any additional benefits, and if there are any, those are neither properly communicated nor effectively being transferred to the policy holders. Many consumers complained that UAE insurance companies either didn’t offer them comprehensive plan or charged much higher premiums for one, compared to laid out lower limits. Also, companies devalue vehicles by greater percentages and often refused to offer insurance for past claims. But that may just be a wrong perception.
Benefits under Revised UAE Auto Insurance Regulations
Despite consumers anguish over the hiked premiums and attitude of insurance companies toward them, Finance expert Jonathan Rawling begs to differ. According to Rawling, benefits offered under revised UAE auto insurance regulations outweigh the added premium costs. He added:
- Now minimum cap for third party damage has been increased to Dh2 million from just Dh250,000. It translates to the fact that any damage caused by you up till Dh2 million will be covered by the insurance provider.
- Consumers can now benefit from emergency services at no additional cost, as those are also encompassed into vehicle insurance plan.
- Elaborating on the UAE auto insurance regulation’s benefits regarding provision of replacement car clause, he told it will be offered to the victim or the party not at fault for the accident. If someone has hit your car, their insurance firm will pay you up to Dh300 per day for a period of 10 days or will arrange a replacement vehicle for the same duration. Individuals at fault will get replacement car only if they have got the extra coverage.
- Now insuring terms are standardized. If an insurance policy is comprehensive by name, then it will act like one and will offer comprehensive protection.
Another veteran from the insurance industry, Frederik Bisbjerg answered consumer’s complaints:
- Disproving the accusations of the consumers that firms are not complying with the revised UAE auto insurance regulations, he said he did not see a particular case where they denied an eligible customer from their rights. However, it is highly likely that some providers might have failed to communicate the new benefits to consumers, thus developing wrong anticipations.
- He also answered concerns over non-renewal of insurance policies because of previous appeals and said that it is impossible to not get a new policy, however, people with repeated claims might have to pay high premiums. With that said, this is where the new UAE auto insurance regulations safeguard their interests, as now there is a cap on maximum premium as well. So, person with a long history of insurance claims will still pay a reasonable premium.
- Bumping the maximum cover for property damage is for a good reason. It provides extended liability coverage to husbands, wives, children and parents of policyholders.