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This is one of the basic tips on car insurance premium calculation that we can provide to a car owner.
car insurance companies in uae consider a host of factors while computing your insurance premium. But, the value of your car is one the most important elements in this regard.
Your vehicle’s value can have a big (or small) impact on your insurance premium, but it is also conditional to other related factors like car make, model etc. For example-
Buying a low-priced car doesn’t imply that you will get the cheapest car insurance in the UAE. It is not necessary that a car which has a lesser worth after years of usage will be cheaper to insure. So, this is one misconception that needs to be clarified.
You are probably thinking, why? Here’s the answer to your query -
It may come as a surprise to you, but the insurance premium for a muscle car (which is relatively cheaper than an SUV) can be costlier than an expensive family SUV because of all the above-mentioned factors.
As you already know, the value of a car depreciates by AED 20,000 the moment it is driven out of the showroom. It will depreciate further with each passing year.
But, why does the cost of the premium go up every year?
The cost of the premium is increased –
It is also affected by other similar factors. Mentioned below are some of the key reasons –
If you overvalue your car while purchasing car insurance in UAE, you will end up paying a higher premium. At the time of accidental claims, the insurance provider will only consider its current market value.
In case there is a total damage, the insurance company will pay out the market value of the car instead of the sum assured. And, you will only waste your money on high premiums and will not get any benefits in return.
Summing it up!
If you want to buy an affordable car insurance plan, simply searching cheapest car insurance UAE on Google will not help. You need to do some research to find the best deal possible. We have simplified it to help you understand better and make an informed purchase. So, the next time when you buy car insurance, do consider these factors before signing the deal.