Car Insurance in UAE: All You Need To Know About No-Claim Discount
You are here probably because of your car insurance policy and are wondering about your No Claims Bonus – the discount given by your insurance provider for every claim-free year.
You can avail this discount while renewing your policy and if you switch from your current insurer to another, you get a no-claim discount certificate from the last insurer. It is the most reliable way of saving on your insurance premium.
See how it helps you save and how you can maintain it over the years -
How It Helps You To Save?
No claim bonus adds up every year, and the higher the number of claim-free years, the higher is the discount.
Did you know that you could save up to 20% on your car insurance premium with a no-claim discount? As per the UAE Insurance Authority, an insured that has not made any claim for 1 to 3 years is allowed for a discount between 10% and 20 % while renewing their car insurance in Dubai.
If you are lucky enough and have a good driving record, then some car insurance companies in UAE may provide you up to 50% no-claim discount, considering your age, profession, and customer record among other factors.
What if you Make a Claim?
Usually, people think that no-claim discount will be nullified if a claim is made in the previous year. However, car insurance companies reduce the percentage of no claim discount during policy renewal. It varies from one insurance provider to another, as there is no set formula to calculate this reduction in the premium.
Your no-claim bonus is maintained even after making a claim for an accident or any other unforeseen event. Therefore, it is advisable that you check this with your auto insurance provider.
Can you Transfer your No Claims Discount?
No claims discount is availed on the insured vehicle and not the driver. You can transfer your no claim discount when changing your car insurance provider. You will get a 'No Claims Certificate' from your previous insurance company at no additional cost – as per the new regulations issued by the UAE Insurance Authority.
How To Opt for No Claims Bonus?
Some motor insurance companies in the UAE offer no claims discount protection. It is an optional cover that you can add on to your existing car insurance policy.
You are required to pay an additional premium to protect your no claims bonus after making a claim in the preceding year. This varies from one insurance provider to another and is subject to policy terms and conditions.
Some car insurance companies in Dubai will let you keep your no-claim bonus even if you make several claims (up to a specific limit) in a year, whereas the others will restrict the number of at-fault claims. However, it does not imply that your car insurance premium will not increase the next year since the claim will be shown in your history.
Key Points to Note
- You can only avail No Claims Discount during policy renewal
- No Claims Discount is calculated on the basis of the car and not the insured
- If you are buying insurance for two cars, you can use your No Claims Discount on your second car as well.
- In case you are at fault, and your insurer has to pay for the loss, your entire No Claims Discount or a part of it can be fortified
- If it is a no-fault claim, the insurer may re-claim the payment from the third-party insurer and it will have no effects on your No Claims Discount.
So, What does that Mean?
It is quite evident that every car insurance company has different rules and regulations pertaining to the No Claims Discount. The discount rates also vary. It is recommended that you check with insurers and compare various car insurance quotes before you make your decision.