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How to Lower Your Car Insurance Costs in Dubai

Written by Lawrence

Proven tips to reduce your car insurance expenses in Dubai

Car insurance is a necessity for all drivers in Dubai, but it can be expensive. the only way out is to know how to lower your car insurance costs in Dubai.

In fact, high car insurance prices in Dubai and UAE in general are among the leading hindrances to UAE residents accessing quality car insurance policies.

I know this because I’ve done my research, I’ve talked to people from all walks of life, and I’ve heard their stories about how car insurance has impacted their finances.

I’ve heard from people who have had to pay through the nose for a minor accident and others who’ve been denied coverage because of their previous driving record. 

In this post, we’ll cover:

  • How much does car insurance cost in Dubai?
  • What factors affect car insurance rates in Dubai and UAE?
  • How to lower your car insurance costs
  • Drive safely
  • Maintain a clean driving record
  • Increase your deductible
  • Bundle your insurance policies
  • Shop around for quotes

Why you should keep reading:

If you’re looking for ways to lower your car insurance costs in Dubai, then this blog post is for you. I’m going to share some practical tips that you can use to save money on your car insurance.

So, if you’re ready to start saving money on your car insurance, then keep reading…

What is car insurance?

Car insurance is a financial protection coverage for vehicles against potential risks, damages, and liabilities.

In Dubai, UAE, and the whole GCC nations, it is mandatory to have car insurance.

Car insurance in Dubai is majorly divided into two:

  1. Third-party Liability Insurance – this is a cover to third-party vehicles and property in case of an accident where the policyholder is at fault. This is the minimum requirement by the law in order to legally drive on Dubai roads.
  2. Comprehensive Insurance – this is a broad coverage providing compensation to both policy holder and third party. In other cases, it covers fire, natural disasters, and other unintended risks.

How much does car insurance cost in Dubai?

The average car insurance in Dubai costs around 1.25% to 3% of the car’s value. The car type and value and driver-related factors also affect how high or low your premiums will be.

The average cost for a comprehensive insurance cover in Dubai is around AED 1,200 per year while its third-party equivalent costs AED 500.

Generally, the lower the car’s value, the cheaper your policy will be. The more your experience as a driver is, the lower your premium will be because Insurance providers see you as a low-risk driver. If you’ve made no claims for a period of time, you qualify for a discount.

Let’s discuss these factors in detail;

Factors that affect car insurance rates in Dubai & UAE

When providing you with a car insurance policy, any insurance provider has a checklist that will be used to decide the amount of premiums that you will pay. 

If an insurance provider offers you a policy which sounds too good to be true, just interrogate whether they took all these factors into account. 

A cheap insurance policy can be more draining to you when an accident happens because the insurance provider could just have covered the bare minimums leaving you exposed.

Let’s now look at the factors which affect the insurance rates:

  • Car Type – A car type affects the insurance rate because of its maintenance costs. This is a no-brainer because a simple standard car like a Honda Fit will demand much lower maintenance than a Honda CRV. 

Similarly, a Toyota Crown will have a low maintenance cost compared to a Toyota V8.

  • Car Value – This is one of the most important factors determining car insurance policy costs in Dubai and the whole UAE.

Car ValueInitial Premium Rate (%)
Less than AED 100,0002.5
AED 100,000 – AED 300,0002.35
AED 300,000 – AED 1,000,0002.2

Note that these are tentative base rates and might be different from one insurance provider to another.

  • Car History – This is applicable to second hand cars only where if a car has ever been involved in a road accident or damage, the premium costs will be higher than a car which has a clean history.

  • Age – Insurance providers in Dubai believe that young drivers are more prone to accidents due to dangerous driving than their older counterparts. 

This belief is backed by studies which confirm that the 18-35 age group has the highest rate of traffic fatalities and injuries.

Age BracketAdditional Insurance Cost(%)
23 – 24 years25
25 – 30 years15
30 – 60 years10

  • Driving Experience – The driving experience and history is another major factor that insurance providers look at when calculating premiums.

A driver with a history of traffic violations, accidents and a number of road expenses will most probably be making huge regular insurance claims and therefore their premium rates will be higher to match this risk.

  • Claims History – The longer you stay without making an insurance claim qualifies you for a no-claim bonus or discount.

The no-claims discount/bonus acts as a reward system for good drivers who don’t get involved in accidents. The more you stay without making a claim the more bonus you get.

Policy factors

  • Agency and Non-agency repairs – This is one of the add-ons which has a direct effect on the premium rate that you will pay.

Agency repair is an add-on that will cover your car’s repair in the dealer or agency that you bought it from.

This is good for high value cars since it will guarantee original spare parts and professional handling of your car, at a higher cost though.

  • Excess or deductibles – Excess or Deductible is the amount you as the policyholder will pay out of the claim you make. If you have a deductible of 20% and you make a claim of AED 40,000, the insurance provider will pay you AED 32,000 and you will pay the remaining AED 8,000.

The higher your deductible is, the less premium you will pay.

  • Add-ons – Add-ons are additional coverage options for your car. They are optional and come at an extra cost to your policy premium.

They include;

  • Personal accident cover
  • Replacement car
  • Roadside assistance
  • Oman extension
  • Rent-a-car
  • Windscreen coverage
  • Off-road recovery
  • Natural calamity cover
  • No-claims bonus
  • Agency repair
  • Discounts and offers – Car insurance providers in UAE provide offers and discounts from time to time.

When seeking car insurance cover, be on the lookout for discounts and offers. They might make your insurance policy look cheap on the onset only for the offer period to end and you are left facing a huge premium to pay.

Keeping all these factors in mind, it is only ideal to be on the lookout to ensure you get real value for your money.

Often, the insurance policy that seems cheap could be costly. An expensive one also doesn’t mean that you are fully covered. So, it is important to interrogate your insurance policy conditions to ensure what you see is what you get.

Let’s now look at how we can stay ahead and lower the insurance costs…

How to lower your car insurance costs in Dubai:

Drive safely

When you drive safely, you will rarely make any claims.

This will qualify you for the no-claims bonus and discount. It will also result in a lower premium calculation by the insurance provider since they will view you as a low-risk driver.

Maintain a clean driving record

This goes hand in hand with the first tip of driving safely in the UAE. The black points system has been put in place to ensure that every punishable traffic offense is documented.

Having many black points translates to you being a poor driver and you will need to undergo some training to reduce the points.

Increase your deductible

The more deductible that you will pay lowers the premium you will pay.

You should keep in mind that if you increase the deductible, in case of any eventuality leading to a claim, you will pay more out of your own pocket. 

This is a perfect tip if you are confident of your driving skills.

Don’t modify your car

There’s always a higher charge for cars which deviate from the standard specifications. This is because any modification done to the car will alter its functionality.

After taking your insurance policy, and you want to do any modification on the car, consult with your insurance provider.

The key is comparison

Never take the bait of settling for the first car insurance quote in Dubai you get even if it appears cheaper to you. 

Find other quotes and compare them. What do they offer? How do their policies stand out? What’s the reputation of the insurance provider?

Only after having the full picture is when you can decide on one.

Go for a low value car

When and where possible, go for a low value car. This will depend on a number of personal factors. A low value car will cost you less to insure in Dubai unlike a high value car.

Don’t be a last-minute individual

Do your research in advance for the best insurance companies in the UAE. When you have a deadline upon your neck, you will make rush decisions which will impact you later.

Buyanyinsurance has a team of experienced professionals who will assist you get just the perfect insurance cover for you and your family.

Conclusion

Choosing the right and affordable car insurance provider in Dubai is as important as owning a car. Remember that it is illegal to drive a car in Dubai without car insurance. 

Consider the factors we mentioned above as affecting the premiums you will pay and position yourself so as not to be overcharged.

What is the most important factor to you when choosing car insurance?

We look forward to hearing your thoughts in the comments below!


Originally published Aug 14, 2023 10:09:00 AM, updated Jan 09, 2024

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