Why Car Insurance Rates Are Suddenly the Double in UAE?

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Car insurance in the UAE is mandatory. More than that, a car insurance plan will ensure that you have adequate financial aid if your car is damaged in an accident. However, aspects such as premium may change after you actually make a claim. For instance, if you have been at fault in an accident or have hit a car parked in a garage, you may be charged higher insurance premiums thereafter. In such cases, these increased rates will not bother you. 

However, on the flip side, if you have been a responsible driver with no speeding tickets or a bad driving record, higher insurance premiums can have you scratch your head. This could prove a highly confusing situation where you might end up verifying your driving licence and its record repeatedly.

Car insurance companies in the UAE consider several factors while evaluating car insurance rates. In some cases, you need to pay higher insurance rates even if there are no tickets or wrecks involved. There are indeed factors beyond individual drivers that have led to this phenomenon. Keep reading to know the major reasons for surging car insurance rates in the UAE, followed by measures you can take to lower the same.

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*Above mentioned prices are for Nissan Altima S2.5 L, 2017 model.

Top Reasons for Rising Car Insurance Rates in the UAE

Here are a few major factors that have led to an increase in car insurance rates in the UAE.

  • Rising Car Repair Costs

The steady increase in car repair costs in UAE is widely cited as one of the reasons for the insurance premiums surge. Additionally, the newly introduced safety features and expensive auto parts can also reflect in the insurance rates by moving up the latter. The aspect of expensive auto parts is significant here, as an increase in their theft done with the intent of selling them in the black market can further surge their prices (and the insurance rates).

  • Rising Healthcare Costs

With more people driving, the possibility of accidents taking place has also increased due to the sheer number. Consequently, if the insurance companies in the UAE have to pay more for reported claims, they can increase the insurance rates to compensate for the same. This, combined with rising healthcare treatment costs, is among the reasons for the sudden hike in cost per claim rates, which leads consumers to pay higher auto insurance premiums.

  • Lower Credit Score

Most car insurers in the UAE consider your credit score while offering insurance prices. As per a recent study, about 95 per cent of auto insurers consider credit history as one of the major factors affecting the insurance rates for buyers. Consequently, applicants with a low credit score, even if having a clean driving record, may need to pay high insurance rates. 

  • Change in Location

Insurance rates vary for different locations in the UAE. Moving to a different area even if just a few miles away can affect insurance rates and lead to a sudden surge in them. Some of the reasons for an increase in insurance rates with respect to location include varying crime rates, theft rates, population density, etc. For instance, an area with a high population density may have more cars on the road with a possibility of more accidents taking place. Or, in the case of areas with a higher theft rate, there is an increased probability of a car facing the same. In such areas, the insurance companies keep the insurance rates higher as they may have to pay more on the claims. 

  • Distracted Drivers

More accidents lead to more registered claims for the insurers to pay. As per recent reports, accident rates in the UAE have risen in the past few years, with one of the reasons including distracted driving. With the advancement of internal technology and smartphone usage, distracted driving has reportedly become more prevalent. The more accidents take place due to irrational driving, the higher the auto insurance costs the insurers charge. Ultimately, these costs are borne by all drivers in the form of increased insurance rates, even for those who drive while avoiding distractions on the road.

  • Higher Speed Limits

Relocating to an area with higher speed limits can lead to higher insurance rates as these areas may prove more prone to accidents. Various locations in the UAE have high speed limits, and they may end up having high insurance rates for residents.

  • Extreme Weather Conditions

Major weather events like floods, hurricanes, blizzards, etc., in a specific area can also lead to increased car insurance rates. Losses and damages caused due to these events lead to an increase in insurance claims, and the insurance companies generally need to pay more to maintain a good claim settlement ratio. Moreover, with the damage to infrastructure caused by these events such as poor roads and so on, increased chances of accidents are expected by the providers – reflecting in the insurance premiums. 

How You Can Lower Your Insurance Rates?

While you may have higher car insurance premiums, you can always negotiate and bring them down significantly. Here are a few effective ways to lower your car insurance rates.

  • Explore More Insurance Options

Exploring the best car insurance plans in UAE can help you compare and get one that best suits your requirements at affordable rates. Thus, it is highly recommended to go through all your insurance plan options before purchasing one for your car. You can visit our ‘car insurance’ section to check out various insurance plans available as per your preferences. 

To find the best fit, you can fill out the lead form available on our website by providing details like your name, location, age, monthly income, contact details, etc. Your details will allow our portal to fetch suitable car insurance plans. From this list, you can shortlist plans based on parameters like insurance rates, additional charges, coverage, terms, and more. 

  • Use Car Insurance Calculators

You can easily use car insurance calculators to evaluate estimated car insurance rates based on different factors like your age, location, driving records, monthly income, and more. Car insurance calculators are also available in our car insurance section that you can use to calculate your possible insurance premiums. Once you have an approximate idea of the premiums of various car insurance providers, you can always negotiate with your insurer regarding the premium and insurance rates.

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  • Speak with Your Agent

You can also check with your car insurance agent or a representative to check if you qualify for any type of discount program. Several insurance companies in the UAE offer a discount on car insurance policies if you buy more than one insurance plan. Additionally, you can also check with the agent regarding discounts for having safety equipment, airbags, daytime running lights, anti-theft systems, etc. 

  • Raise Your Deductibles

Another effective way to reduce your insurance rates is to raise your deductibles. However, keep in mind that you might pay a higher amount from your pocket to cover for loss or damage caused due to an accident when you file a claim after selecting this option. The standard deductible percentage offered by the insurance companies in the UAE is 20 per cent.

  • Call Our Help and Support Desk

If everything else appears overwhelming or confusing, you can always contact our help and support desk and speak to our experts for assistance. Our professionals will analyse your coverage and financial needs and suggest the most suitable car insurance plans accordingly. The most remarkable part of this option is that our help and support team is available round-the-clock so that you can contact the support people anytime from anywhere for solutions.

Key Takeaways

  • Analyse all factors that affect your car insurance rates and use a premium calculator to get an estimated figure that you need to pay.
  • Explore multiple options before selecting an insurance plan and paying for the same.
  • Go through all the terms and conditions to have a better understanding of the insurance coverage your chosen insurer is providing.
  • Try to implement the methods listed in the article to reduce your car insurance rates.
  • Visit our car insurance section to find the best-fit car insurance plans.