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How to Get the Cheapest Car Insurance in Dubai

Written by Sahar

In the UAE cheap car insurance is considered hard to get. Dubai is famous for being an expensive city to live in. Rent is increasing every year, the cost of living goes up without fail, and now add to these necessary expenses the mandatory expense of car insurance premiums every month.

The UAE’s laws making car insurance mandatory has opened opportunities for many insurance companies to open a branch in Dubai. A lot of homegrown companies have also entered the fray. Assured of customers they have devised policies that will help clients, as well as line their pockets with profit.

So how can one get cheap car insurance in a market like Dubai?

By understanding what factors affect your premium and using them to your advantage!

Vehicle Registration

What does it matter where your car was registered? A lot, actually. According to our research, many insurance providers rate a higher premium to vehicles registered in the Northern Emirates. Vehicles registered in Dubai or Abu Dhabi get a lower premium. Why? Because according to their analysis data more accidents occurred in the Northern Emirates. Hence, the higher the premium. If you want cheaper car insurance you should buy a car that is registered in Dubai or Abu Dhabi.

The Vehicle Itself

There is no one rule that determines how a company will rate your vehicle. Insurance providers have their own standards and set policies that they apply to each case. However, one thing is for sure, that the vehicle is the most important factor. Some of the trends we’ve observed over the years are:

  1. Your vehicle type will determine its value and how much coverage it needs. The latest models and high-end luxury cars will go for a higher premium as they are expensive and thus their value is high. Second-hand cars or family cars have more competitive rates. Going for something practical with a middling value will ensure a lower premium.
  2. However, some insurance companies specialize in giving competitive rates to high-end luxury cars that range from anywhere higher than AED 400,000. So if you own a new/luxury car you should find these insurance providers.
  3. Similarly, there are providers who prefer doing business with only low-value vehicle owners. They are even willing to offer the minimum premium rate, below which no insurer will go. Seek out these insurance providers if you have a low-value car and want to pay the minimum in insurance.
  4. You will also find vehicular bias when you search the insurance market. Some insurance providers have a preference for a particular make or model. Some have been known to blacklist certain models as well. They will charge higher for a make of car that they think is risky despite facts stating otherwise.

It is very easy to find the provider that will gel best with you. Car insurance comparison sites are great platforms to conduct research and compare policies. It is quick and allows you to weed out the providers that aren’t giving you the best cheap rates available.

The Vehicles Value

Car insurance rates range from 1.75% to 4% in the UAE. The rate is applied to the value of the vehicle and is known as the sum insured. It can, therefore, be concluded that the lower the value of your car the lower the sum insured. To get cheap car insurance quotes to make sure the value of your car is within the range of your budget.

14 factors that affect your car insurance rate
LittleYellowPerfect.com

Vehicle Specifications

For a vehicle to be insured it needs to be GCC compliant i.e. bought in the GCC/UAE. Car insurance providers are reluctant to insure vehicles imported from the USA or Europe. This is because they aren’t sure if the vehicle is GCC complaint. There is also the question of availability of parts in case of damages due to collisions. Of course, car insurance providers can relent to insuring imported cars if your broker can convince them that the car is GCC approved.

Purpose of Vehicle

Similarly what purpose your vehicle will be used for also has an effect on your premium. Cars used for personal, and domestic uses are given lower premiums. Vehicles used in fleets for hire or commercial purposes are charged a higher premium because of the risk, as well as the constant change in drivers who have not passed through the insurer’s scrutiny.

Your Driving License

Since many residents of Dubai are expats they hold driving licenses of other countries. Some of these countries driving licenses are easily convertible to UAE licenses without a driving test. Most insurance companies give owners of these driving licenses a significantly lower premium because they assume that the drivers have sufficient knowledge of driving precautions on the road, and enough experience.

Drivers Nationality

Similar to the bias of driving licenses, insurance companies hold a bias against certain nationalities. They believe and have stats to prove, that certain nationalities are part of more accidents than others. They give greater discounts to nationalities they think have better driving behaviour.

Age

Age is another factor that adversely affects your car insurance premium. Drivers under the age of 25, and over 60 are charged a higher premium. The former for their assumed lack of experience, and the latter for their lack of dexterity because of age. To get cheap car insurance the principal policyholder should be between the ages of 30-40 to get the axiom benefit.

No-Claims Certificate

Though car insurance is mandatory by law there is also a silver lining. No-claims certificates are also mandatory by law and they are definitely a benefit to the policyholder. If your claims history has been stellar, and you have made no claims then you are awarded the No-Claims certificate. Offering a substantial discount on your premium, NCB can be easily transferred to new policies. So if you are an owner of an insurance policy try to limit your claims so you can avail the NCB at the time of renewal.

Accumulation of Fines

A recent development is analyzing policyholder fines history to determine how likely an individual is to get in a car crash. They call this risk analysis and it can have an adverse effect on your premium. To keep things economical make sure all your fines are paid, any black points on your license are cleared, and keep a clean history going forward.

Optional Add-Ons

Comprehensive Coverage plans have more going for them then Third-Party Liability; there is no doubt about that. Yet insurance providers offer add-on options to increase the coverage and security of your policy. These do not come cheap. Each add-on will add a couple of 100 dirhams to your policy, effectively increasing your premium. Therefore, to keep your car insurance cheap, only opt for the absolutely necessary add-ons.

Cyclical Ratings

For the past decade or so car insurance pricing has been cyclical in nature. As the market rises and falls so do the rates of insurance companies. As a result, car insurance providers in Dubai haven’t been able to cement their rates. Keep a track of these cycles, if you’re being offered a steep quote wait it out a little bit. The cycle will drop and you can get a better deal.

Switching Providers

Because the market is so competitive, car insurance providers slash their rates to poach customers. So if you already have an insurance policy that you think is too steep, your best option is to switch to a new provider who will offer a lower premium. Cheap car insurance can be achieved by switching at the time of renewal to more affordable options. You can use online comparison platforms to find new potential insurance providers.

If you keep the above in mind when searching for an insurance policy you’ll be sure to reduce the projected quotes. Cheap car insurance takes a little work to find but it is not impossible to do so. Be thorough and as involved in the process as you possibly can to ensure that you get the most economical rates in the market.


    Originally published Nov 04, 2020 12:05:00 PM, updated May 31, 2021

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