Car Value Impact on Car Insurance Quotes In Dubai
Car Value Impact on Car Insurance Quotes In Dubai
Car Insurance 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 intend to buy a new insurance policy or renew it, then you must be wondering how much it will cost you.
To estimate 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.
Car Insurance Quotes in Dubai FAQ’s
Which car insurance network is best in the UAE?
Following insurance companies are considered best in UAE:
- AXA Gulf Insurance
- Abu Dhabi National Insurance company (ADNIC)
- Emirates Insurance Company
- Ras Al Khaimah National Insurance Company.
- Dubai Islamic Insurance & Reinsurance Co.
- Oman Insurance Company.
- Daman Health Insurance.
- MetLife Individual Medical Plan.
Is car insurance cheap in the UAE?
Cars with a market price of more than 300,000 have to pay 2.75% of their car’s value in insurance. The average car insurance however is 3% of the car’s total value.
How often should you change car insurance companies?
There is no set rule about how often you should change car insurance companies. But its recommended to shop around every 6-12 months as the rates keep changing and companies keep changing their policies.
Thus, to make the below information simpler and clearer, we have presented the following cases.
How important is vehicle value?
The premium for your car insurance depends upon several factors, and the value of your car is one of the significant factors among them.
It is one of the basic tips that car insurers provide to car owners about calculating their motor insurance premiums.
The impact of the vehicle’s value 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 coverage plan.
How premium differs for low value and high-value cars?
Car insurance Quotes in Dubia are based on a certain high and low methodology that is essential to understand.
If you’ve bought a low-value car, it does not imply that you will get the lowest price for its insurance.
It is also unnecessary that if your car has been in use for years and has lost most of its worth, you will not have to pay much to get it insured.
The misconception regarding lower premiums for low-value cars needs to be cleared.
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 damage repair costs 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, due to the contribution of these factors in determining the insurance premium, a “not so expensive” muscle car may be costlier to get insured than an expensive SUV.
Why Car insurance premium rises and car value depreciates with time?
The car’s value 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 insurance price is higher than the insurance price for a new car.
Why does the value of insurance premiums increase with time? This is a question that confuses many people and causes a bit of frustration too.
The reasons for this are:
If you have any claims on your record that you’ve filed with your previous insurance provider, you will be charged a higher premium on the renewal of your insurance policy.
This is because the insurance companies consider an increased probability of you filing for claims again and want to secure their end by charging you a higher price.
2. Poor safety:
If your car’s safety features 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, 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 claimed in the last year, you will have to pay more premium for your policy this year.
If the driver has any traffic laws violations on their record, they may 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 car’s market value instead of paying the sum assured.
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; 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 calculating 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 Jun 08, 2022