What if I drive more than my set kilometre limit?

For third-party liability claims, the policy remains valid irrespective of mileage. But since Own Damage coverage is directly linked to your set kilometre limit, claims can be impacted there. If you are the at-fault party and have gone above your kilometre limit, your Own Damage won’t be covered. If you are not at fault but have exceeded your limit, the cost will be recovered from the other party. This is again because your own Own Damage cover is no longer valid as soon as you cross your slab. So if you expect to go above your kilometre limit, don’t wait for a claim to happen! Top up your kilometre allowance beforehand.

Pay As You Drive Car Insurance in the UAE

Two cars can be in the same building in Dubai. One does the Sharjah commute five days a week and clears 28,000 km a year. The other does a school run and a Saturday grocery trip and barely touches 4,000 km. Under a standard motor policy, both owners can have roughly the same premium for the same regulated cover.read more

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Written By

Nupur JainSenior Content Writer (Expertise - Motor Insurance)

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Toshita Chauhan BalochiChief Business Officer – General Insurance @ Policybazaar.ae

Last updated on 29 October 2026Editorial Standards

At Policybazaar.ae, we saw this gap. We understand that your car insurance price should reflect how much you drive. Pay As You Drive changes that. You tell us how far you realistically expect to drive over the policy year. Your premium is priced against that number instead of a market average. Drive less, pay less.

What is Pay As You Drive Car Insurance in UAE?

Pay As You Drive (PAYD) is comprehensive car insurance priced around distance. Instead of a flat annual premium, you declare an expected yearly kilometre figure (usually by picking a slab). The insurer uses that slab to work out what you pay. The reasoning is simple. A car parked in the basement six days a week is exposed to less risk than one running Dubai to Abu Dhabi twice a week.

Best Car Insurance in UAE

Some of the best and the cheapest car insurance quotes in Dubai are:

*Above mentioned prices are for Honda City EX 1.5L, 2022 model.

Pay As You Drive vs Standard Comprehensive: What is Different?

Parameters	Standard Comprehensive	Pay As You Drive
Cover	Full cover under the unified policy	Exactly the same cover
How the price is set	Car value, your age, claims history	The same, plus the slab you choose
Distance limit	None	You pick 0–12,000 km or 0–24,000 km
Third party cover	Runs until the policy ends	Runs until the policy ends, whatever your distance
If you drive extra	Nothing to do	You top up for the extra kilometres or your policy gets converted to a third-party liability (TPL) plan
Best for	Daily and long-distance drivers	Those with low-mileage vehicles or multiple cars

How Many Kilometre Slabs are There Under Pay As You Drive?

There are only two slabs to choose from.

Slab	Yearly Distance Covered
Slab 1	0 to 12,000 km
Slab 2	0 to 24,000 km

Notice that both slabs start at zero. The second slab covers everything up to 24,000 km. It is not only for the distance above 12,000 km.

How Do You Know Which Slab to Pick?

Follow these steps to pick the slab:

Think how far you commute on a typical day. This includes your trips to and from the office.
Multiply this by the number of days you drive in a year.
This gives you an estimate of your car mileage.

If the answer is comfortably under 12,000 km, the lower slab suits you. If it is above that or close to it, choose the 24,000 km slab.

What Does a Pay As You Drive Policy Cover?

The same things as any comprehensive car policy in the UAE. The cover follows the Unified Motor Vehicle Insurance Policy.

The plan covers damage to your own car and your legal liability to other people for injury or damage to their property.
The third-party property damage limit is AED 3,500,000. No limit is there for third-party liability resulting from bodily injury.
The tariff also builds in personal accident cover. This is applicable for the driver and the passengers.
Own vehicle damages/losses due to fire and theft are covered.
Emergency medical expenses are covered up to an annual aggregate limit of AED 5,000.
Own vehicle damages and losses due to storms, riots, strikes, and floods are also covered.
Losses due to valet parking theft are covered.

Who Should Consider Pay As You Drive Insurance?

It suits a fairly specific set of drivers:

Households with a second car that only comes out at weekends
Residents who commute by Metro or bus, and drive mainly outside work hours
Anyone working from home two or three days a week
Retired drivers and anyone whose driving is short and local
Owners keeping a car for occasional use rather than daily transport

How Do We, at Policybazaar.ae, Check Your Mileage?

Usually by your odometer reading. We will ask for a photo of it when you buy the policy.
There is also an official record of your mileage. In the UAE, your car goes through a technical inspection at an approved centre before you register or renew it. The reading is noted there.
If you are the first owner and the car is new with no mileage, you don’t need the technical inspection for three years. This is counted from the year of manufacture or the year of registration, whichever comes first.

Be honest about your distance. As per the policy, a claim can be refused if the insurance was taken out based on wrong information or on facts that were not disclosed, where those facts affected the decision to cover you or the price.

Note: The ‘Pay As You Drive’ product is offered by Policybazaar.ae and Doozy. The insurance coverage is offered by Al-Ittihad Al-Watani (Registered under Insurance Authority License No. 42).

Disclaimer: This article is for general information about how mileage-based motor insurance is priced and regulated in the UAE. It is not advice on any specific policy. Cover, discounts, and rules differ between insurers. Always read your own policy schedule and confirm terms with your insurer before buying.

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Frequently Asked Questions (FAQs

For genuinely low-mileage drivers, usually yes. For anyone covering an average or high annual distance, a standard comprehensive policy is normally the better price.

Not for most UAE plans. Declared mileage and odometer readings are the standard approach here.

Only if you add GCC cover, exactly as with a standard policy.

Yes. The regulation frames kilometre-linked pricing as something the insured requests. It applies to new and renewed policies alike. You will need to ask your insurer for it.

The same process as any UAE motor policy — cancellation or transfer through your insurer, with the premium adjusted for the unused period. The regulation provides for premiums to be collected proportionately for fractions of the insurance period.

For cars that are driven less than 12,000 km in a year, Policybazaar.ae users have saved around 30 to 55% compared to regular premiums. However, keep in mind that actual savings depend on your car, your chosen kilometre slab, user profile, and more.

Pay As You Drive is a standalone policy on Policybazaar.ae, not an add-on. It’s pretty much like standard comprehensive car insurance, covering third-party liability, own vehicle damage, fire/theft, and so on. The only difference is that your Own Damage premium is set against your chosen kilometre slab. This is different from standard plans that have flat annual premiums.

Yes. At the time of renewal, you can check how much you actually drove. You can then change the slab that is a better fit as per your usage, which keeps your premiums aligned with how you have actually driven in the year so far.

For third-party liability claims, the policy remains valid irrespective of mileage. But since Own Damage coverage is directly linked to your set kilometre limit, claims can be impacted there.

If you are the at-fault party and have gone above your kilometre limit, your Own Damage won’t be covered.
If you are not at fault but have exceeded your limit, the cost will be recovered from the other party. This is again because your own Own Damage cover is no longer valid as soon as you cross your slab.

So if you expect to go above your kilometre limit, don’t wait for a claim to happen! Top up your kilometre allowance beforehand.

No. Choosing Pay As You Drive does not impact your No Claim Discount (NCD)/No Claim Bonus (NCB). This discount or bonus is based on whether you made any claim, not the kilometres you drove. As long as you remain claim-free and meet the insurer’s criteria, your NCD/NCB is not affected.

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