When Does Car Insurance Go Down for New Drivers?

It is crucial to secure expensive assets like a car, not to mention the mandatory status of car insurance for car owners in the UAE. If your car gets damaged, you would have to go through considerable financial losses. Insurance plays a prominent role in such a situation, as it can help you get the car repaired without incurring a hefty monetary loss. ...read more

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When insuring a car, insurance providers consider multiple aspects to decide the premium that a policyholder would need to pay. However, once purchased, car insurance rates may decrease after a certain period.

What are the Factors that Influence Car Insurance Premiums? 

When determining the rate of car insurance, insurance providers take a number of factors into consideration as discussed below. 

Note: If the insurance company finds any discrepancy in the information provided by policyholders, they may increase the premium or terminate the car insurance plan altogether. 

1. Features, Model, and Variant of the Car

The primary criteria to assess the car insurance premium is the variant and model of the car. Insurance companies tend to set higher premiums for luxury and expensive cars, the reason being that these cars are equipped with expensive spare parts. In case of damage, concerned insurance companies would need to spend more to repair them. 

However, if such cars are designed with enhanced safety features, insurance providers charge a lower premium as the risk of car damage decreases.

2. Age and Driving Experience of the Driver

The next important metric to analyse a car insurance premium is the age of the driver. As per various reports, individuals who fall below the age of 25 are likely to incur a higher premium for their car insurance policies than those on the other side of the limit. 

Since people under this category generally lack experience in driving, they are more prone to accidents as per most insurance providers. Apart from this, even if individuals are above 25 but have lesser driving experience, insurance companies charge a higher car insurance rate. 

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3. History of the Car

The history of your car also affects your car insurance premiums. If a car has experienced multiple accidents or the driver has received numerous tickets for traffic violations, the respective insurance provider can charge a high premium. Note that higher premiums are also charged in case the driver has made several claims in the past.  

4. Deductibles or Excess 

The excess or deductible is another major factor that decides a car insurance premium. It is basically the amount that a policyholder has to pay for a claim before the provider pays the remaining claim amount. With an increase in the deductible amount, the car insurance premium decreases and vice versa.  

5. Agencies or Non-Agencies Repair

When purchasing car insurance in UAE, it is crucial to add repairs to policies. Policy buyers can either opt for agency repairs or non-agency repairs. To get a car repaired by the car’s official dealer, individuals must select agency repair. On the other hand, a non-agency service is one that is done at independent garages/workshops and is approved by the concerned car insurance provider. Those who want to include agency repairs in their policies are required to pay a higher premium in general. 

6. Riders

Riders are fundamentally add-ons that you can avail of on top of your basic plans. Car insurance companies charge a specific amount for some add-on coverage, while others are available free of cost. If you opt for add-ons that are available for a specific amount, the premium of your policy will increase. 

7. Location 

In the UAE, the location where the car will be driven is also considered while evaluating the rate of car insurance. For instance, if your car is registered in a city where the infrastructure is not developed, you would be charged a higher premium as your car would be more prone to accidents or damages in general.

When Does Car Insurance Go Down for New Drivers? 

After learning about the factors affecting car insurance premiums, we will now discuss when does car insurance go down for new drivers. As we saw earlier, the age of the policyholder significantly contributes to the variation of car insurance rates. 

The legal age for driving in the UAE is 18 years. However, irrespective of age, the car insurance premium can differ for both males and females due to some factors. 

When Does Car Insurance Go Down for New Drivers: Males v/s Females

Insurance companies generally tend to charge a higher car insurance premium for male drivers if they are below the age of 25 years. As per reports, insurance companies tend to consider male drivers as riskier to insure than their female counterparts. 

By the time, individuals reach the age of 26-30 years, however, they are considered more responsible drivers. Thus, the car insurance premium for individuals in this age group decreases.  

However, the decreased rates may also vary depending upon the experience of the person in driving. Car insurance companies generally charge a higher premium for drivers with low experience; experienced drivers, on the other hand, can get the plan at a lower premium.

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