Car Value Impact on Car Insurance Quotes In Dubai
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Car Insurnace quotes in Dubai are always being the impactful factor in determining your more premium. One of the factors that play a vital role is car value or in simple terms how worthy your car is?
In the UAE, the value of your vehicle is an essential factor in determining the price you will have to pay to get it insured.
Being an obligated requirement by the law anyone who is purchase car insurance policy must do though research on car insurance quotes.
Car insurance quotes in Dubai depend on different variables. However, the contribution of these variables is subjective to you and your insurance provider in determining the value of your insurance premium.
If you are intending on buying a new insurance policy or renewing it, then you must be wondering how much it will cost you.
To have an estimate regarding the price of the insurance premiums that you will need to be paying, you need to have some information about the determinants of car insurance quotes.
Thus, to make the below information simpler and clearer for you, we have presented the following cases.
How important is vehicle value?
The premium for your car insurance depends upon a number of factors and the value of your car is one of the significant factors among them.
It is one of the basic tips that is provided by car insurers to the car owners about the calculation of their motor insurance premiums.
The impact of the value of the vehicle could be huge or small depending upon its relevance with other factors.
- In other words, its impact is conditional to other factors like car model, type, make, driver’s age, driving history, etc.
- For an example of a driver who is under 25 years old and has been involved in traffic laws violations in the past, then the value of the car does not have a significant impact on the calculation of premiums.
- In such cases, the significance is given to the driver’s age and driving history and the motor insurance premium is calculated accordingly.
- If the driver is above 30 years old and has a claim-free record then the value of their car will play a vital role in the calculation of their motor insurance premium.
Therefore, determining vehicle value can help you evaluate your car for a better covergae plan.
How premium differs for low value and high-value cars?
Car insurance Quotes in Dubia are based on certain high and low methodology that are very essential to understand.
If you’ve bought a low-value car then it does not imply that you will get the cheapest price for its insurance too.
It is also not necessary that if your car has been in use for years and has now lost most of its worth then you will not have to pay much to get it insured.
The misconception regarding lower premiums for low-value cars need to be cleared.
The chances are that you will have to pay a higher premium if your car is low value or old.
Motor insurance companies have legitimate reasons to be doing so.
They charge higher premiums for low-value cars because they consider them riskier especially if the car is old or has been involved in some accidents.
The costs of damage repair are higher as it could be difficult to procure their spare parts.
When the value of the car is under discussion, it does not mean price only, there are other factors too that contribute to the value of a car like a
- Car age
- Engine size
- transmission type, and other risk elements.
Thus, as a result of the contribution of these factors in determining the insurance premium, it is quite possible that a “not so expensive” muscle car will be costlier to get insured compared to a pricey SUV.
Why Car insurance premium rises and car value depreciates with time?
The value of the car starts going down as soon as you drive it out of the showroom. The depreciation of the car continues with time.
But when you try to get an old car insured, its insurnace price is higher compared to the insurance price for a new car.
Why does the value of insurance premium increases with time? This is a question that confuses many people and causes a bit of frustration too.
The reasons for this are:
- Past claims:
If you have any claims on your record that you’ve filed with your previous insurance provider then you will be charged a higher premium on the renewal of your insurance policy.
This is because the insurance companies consider that there is an increased probability of you to file for claims again and they want to secure their end by charging you a higher price.
2. Poor safety:
If the safety features of your car are not up to date, then the car is considered riskier. Thus, the higher premium price for older cars.
3. Spare parts availability:
If the type or model of your car is such that it is difficult to find its spare parts or if the spare parts are not available at all, then the cost of insurance will be higher.
4. Repairing costs:
The repair costs of the 2016 model car and a brand new 2019 model car will be the same.
Because of economic changes and inflation, prices of everything go up. This applies to the repair costs as well.
6. Driving history of policyholder:
The premium of a new policy is calculated based on the claims made in the previous year. Thus, if you’ve made a claim in the last year then you will have to pay more premium for your policy this year.
If the driver has any traffic laws violations on their record, then it is possible that they will be considered a dangerous driver and therefore will be charged a higher price for the insurance.
Why you need to be careful about overvaluing your car?
If at the time of purchasing an insurance policy you overvalue your car, then you will have to pay a higher premium.
Once you file a claim after the accident, the insurer will only consider the current market value of your car.
This factor has a more significant impact in the cases of total damage, where the insurance company only pays the market value of the car instead of paying the sum assured.
In order to get a fair price for car insurance, simply searching online for the cheapest car insurance quotes in Dubai will not be useful.
You need to understand the factors that play a significant role in the determination of your motor insurance premiums.
You do not want to consider just the price, in fact, you have to find the best deal.
Which means a fair price for the coverage that you want and require.
The above information explains how the value of your car factors in the calculation of your insurance premium so, that you can take an informed decision.
Having this information will also help you to negotiate better with your insurer.
Originally published Nov 23, 2020 13:30:00 PM, updated May 18, 2021