Gone are the days when car insurance was considered a luxury. Nowadays, car insurance is a basic necessity. It covers the policyholder’s finances in the event of a road accident or theft. It is very important to have car insurance in UAE. As per the law, it is mandatory for vehicle owners to have vehicle insurance coverage before taking their vehicles out on UAE roads.
Ideally, you should buy an exhaustive insurance coverage that, admittedly, comes at an enhanced insurance premium. However, if you want an affordable car insurance, you’ll have to compromise on its coverage.
As buying insurance can be quite a tedious task, here are 8 tips that will help you to buy a relatively cheap car insurance policy in the UAE.
1. Comparison is the Key
More than 20 insurance providers offer car insurance in the United Arab Emirates. They are all operating in an environment of cut-throat competition and that is why they offer insurance at such competitive prices. Buying car insurance online will help you compare various car insurance quotes so that you can skim through the various options and pick the best plan.
2. Selection is Important
It is important to select a motor insurance plan that fulfills your insurance expectations. Before that, you need to analyze your insurance expectations so that you can compare what you want vs. what you get. As per the latest tariffs, comprehensive insurance premiums have surged. For saloons, it is AED 1,300 and for SUVs, it’s AED 2, 000. If that is too high for you, you can always opt for a third-party insurance policy. It will cover the damages/injuries caused by your vehicle to any third party. The flip side is that it won’t provide you any coverage for own damage.
3. Go for a Basic Car
The more luxurious your car is, the higher your car insurance premium will be. If you want to save money on your car insurance premium, consider buying a basic car. Sports cars, luxury cars, & SUVs come with a high premium. Opt for an economic car as it will be pocket-friendly and will come with a lighter insurance premium.
4. Evaluate the Value of Your Car
Every car owner must know the value of his/her car. Get in touch with your dealer or log on to an online insurance portal and fill in your car information to know the value of your car. You never know, you might be paying more for your car insurance coverage than you need to.
Note- Annually, a car suffers depreciation of 15 percent-20 percent basis on the model and make of the car.
5. Know About Add-Ons
Motor insurance is loaded with various add-ons such as off-road coverage, roadside assistance, rental cars, personal accident cover, etc, in order to enhance basic insurance coverage. These add-ons come at a nominal premium and offer a more extensive insurance coverage. If you opt for such add-ons, your out-of-pocket expenses will be low while your car will get better coverage.
6. High Deductibles Means High Savings
A deductible is the amount of money that a policyholder has to pay from his/her own pocket for a claim. When your deductible is higher, the premium will be drastically lower. Your deductible shouldn’t be so high that it will be definite financial dent at the time of need, nor should it be so low that you can’t afford to keep paying your premium in the long run. Maintaining the balance between your deductible and premiums is key.
7. Keep an Eye on the Discounts
The majority of vehicle owners don’t check the car insurance deals and discounts that they are eligible to avail. For example, if you don’t file any claims in a year, you get a No Claim Bonus at the time of renewal. If you don’t get an NCB, you can rightfully ask for it. If you don’t drive much or have attended a defensive driving course, you should inquire about other discounts (if any).
After all, a penny saved is a penny earned.
8. Perks of Being a Good Driver
Most insurance companies do check your driving record before they give you their quotes. If you have a good driving record, you will have to pay a lower premium. So, to a great extent your driving record determines your risk with your insurance company.
In a Nutshell
Deciding on an insurance premium is like walking on the thin edge of a sword. You have to strike a perfect balance between insurance coverage and insurance premium. Keep in mind that if you go for a lower premium, it means your out-of-pocket expenses will be higher when you file a claim. On the other hand, if you go for adequate insurance coverage and don’t file a claim, you might feel that your insurance money has been wasted. However, you would be wrong to think that because at the end of a claim free year, you get a No Claim Bonus. It is your reward for not filing a claim.
Since insurance expectations are individualistic, a plan that suits your friend might not suit you and vice-versa. Insurance experts recommend opting for a plan that offer maximum coverage at a minimum insurance premium.