How to Choose Between Third-Party insurance and Comprehensive insurance
Should I buy car insurance in the UAE?
Car insurance is mandatory by law in the UAE. So, whether you have a new car or purchase a used-car you need to buy car insurance. If you drive a car without insurance, you will be subject to a fine of 500 dirhams, and you will get 4 black points, and the vehicle will be impounded for a period of 7 days.
You should also take into account the issue of renewing the insurance policy within a month of its expiry date. Otherwise, you will also be exposed to the same violation mentioned above.
What is third-party car insurance?
It is compulsory insurance that covers the legal liability towards a third party / third party / injured person for the accident that you caused and resulted from your fault. This insurance coverage includes –
- Physical damage to third parties inside or outside the vehicle
- Physical damage to others
It excludes the death or injury of any person working for the insured if the death or injury occurred as a result of or during work.
Third party auto insurance is preferred to be purchased or obtained by those who have a clean record of claims in the past. It does not cover any damages suffered by you or your car other than under the comprehensive insurance policy. Herein lies the most important difference between the third-party insurance policy and the comprehensive insurance policy.
Things to know about third-party car insurance
- Third party car insurance is compulsory insurance in the UAE.
- It does not compensate you for your financial or physical damages if you cause an accident.
- It compensates the third party for financial and physical damages if you cause an accident.
- You can add benefits to third party insurance for an additional amount of money.
- It is cheaper but comprehensive insurance offers more protection.
What does third-party car insurance cover?
Third-party car insurance covers the following –
- Vehicle passengers
Compensation for the bodily injuries or death that may be caused to the passengers, except for the insured or the driver of the vehicle who caused the accident or the passengers who work for the insured and have suffered bodily injuries in the course of work and because of it.
- Vehicle and property damage
Provided that the amount arising from a single accident does not exceed 2,000,000 two million dirhams. Whatever the number of people whose property is damaged, including paying the costs of transporting the damaged vehicle to the repair shop.
- Ambulance service
Paying an amount of 6,770 dirhams to the ambulance service provider, and transporting every person who sustained injury or death to the hospital.
- Alternate vehicle
The company provides a replacement vehicle similar to the same type of vehicle for each damaged vehicle, not exceeding 300 dirhams per day and for a period of 10 days only.
- Heirs compensation
In the event of the death of one of the parties involved in the insurance policy, the company is obligated to pay the amount of compensation to the heirs.
What is comprehensive car insurance?
As the name suggests, comprehensive coverage compensates third party physical and financial damages and injuries as well as damages to your own vehicle. Comprehensive insurance is characterized by the fact that you can add many features to the insurance policy to benefit from it and to obtain better protection, for an additional financial premium.
What does comprehensive car insurance cover?
The insurance company is obligated to cover the damages and injuries of the third/affected party as well as damages to the vehicle of the policyholder, i.e., the insured. According to the unified vehicle insurance policy against loss and damage approved by the Board of Directors of the Insurance Authority No. 25 of 2016, the insurance company is obligated to compensate the insured vehicle’s damages in the following cases –
- Loss resulting from a collision, overturning or any other accident
- Fire / external explosion / self-ignition / lightning
- The vehicle is exposed to burglary or theft
- Damage resulting from an intentional act of others
- Loss or damage in the course of land, inland water, or lift or crane transport, including loading and unloading operations, in connection with the transport business
The company is also committed to the following –
- Repair of the insured vehicle or any of its parts
- Paying the value of the loss in cash in the event of an agreement between the insured and the company
- Replacement of the damaged vehicle in case of total loss of the insured vehicle
Difference between comprehensive and third-party car insurance
- Third party insurance is cheaper than comprehensive insurance.
- Third party insurance is compulsory while comprehensive insurance is not compulsory.
- Repairing a vehicle and compensating the damages of the injured third party only in third-party insurance, while comprehensive insurance covers the damages of the third party and the policyholder together.
- The provisions of insurance against third parties do not apply outside the United Arab Emirates, while in comprehensive insurance you can add geographical expansions that include the countries of the Gulf Cooperation Council.
- In third party insurance you will not have to pay the excess while in comprehensive insurance you will have to pay the excess when a collision occurs.
- The insurance company is obligated to repair the damaged car in the agency’s repair shops for vehicles that are less than one year old, while in the comprehensive insurance it can repair the car that is between 3-5 years old in the agency’s repair shops and according to the terms of the policy.
- Third party insurance does not cover accidents caused by natural disasters while comprehensive insurance does.
Third-party car insurance exclusions
This insurance or policy does not cover accidents in the following cases –
- Accidents that occur outside the borders of the United Arab Emirates
- Incidents resulting from natural disasters (floods, tornadoes, hurricanes, volcanoes, earthquakes and earthquakes)
- Invasion, acts of a foreign enemy, wars, whether declared or not, civil war, strike or popular strikes, insurrection, revolution, military coup, usurpation of power, radioactive materials, atomic or nuclear explosions
Comprehensive car insurance exclusions
The company is not obligated to pay compensation to the insured in the following cases
- Loss caused by the depreciation of the vehicle, or the defect or breakage of mechanical or electrical equipment
- Damage resulting from overloading the vehicle, or the number of passengers exceeding the licensed number, provided that it is proven that the accident occurred as a result of this overload
- Using the vehicle for purposes other than those specified in the document
- Using the vehicle in a race or speed test, provided that the accident is a result of speeding
- Accidents resulting from driving a vehicle under the influence of drugs, alcoholic beverages or drugs
- Damage to the vehicle outside the borders of the country, unless there is an accessory that includes coverage within the specified geographical expansion
- Invasion, acts of a foreign enemy, wars, whether declared or not, civil war, strike or popular strikes, insurrection, revolution, military coup, usurpation, radioactive materials, atomic or nuclear explosions, but coverage may be added to this item by agreement between the insured and the insurance company
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You can compare prices of different car insurance providers and choose one as per your budget and requirements.
Frequently Asked Questions (FAQs)
- Who is third party in an accident?
To understand the insurance policy, you must know who the insurance parties are. The first party: the party that caused the accident. The second party: the insurance company. The third party: the one to whom the accident occurred, the injured party.
- Does third-party car insurance include passengers?
Yes, third party insurance covers compensation for bodily injury or death to passengers, except for the insured or the driver of the vehicle who caused the accident or persons working for the insured who sustained bodily injuries in the course of and as a result of work.
- Is the driver covered in third-party car insurance?
No, third party insurance does not include compensation for injury to the driver, driver or persons working for the insured.
- Does third-party insurance include blood money?
Yes, the insurance company is obligated to pay the amount of blood money that a judicial ruling is imposed on the insured driver who caused the death of the third/non-injured party.
Originally published Jan 27, 2023 11:17:41 AM, updated Jan 27, 2023