Replacement vehicle cover is the most popular car insurance add-on for UAE drivers

By PolicyBazaar
  | Published: 23 December 2020 | Last Updated On: 20 January 2021

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Car insurance has become a necessity in today’s time just like any other type of insurance. It guarantees that in case of an accident, your policy covers any damages incurred by you, your car, or the other party without burning your savings. Thus, selecting the best car insurance in UAE is extremely important so that you are protected from any mishappening. 

As a result of this, the number of car insurers in the market has exponentially increased in the past few years. A boon for car owners, the competing insurance companies offer them the opportunity to enjoy lower rates and better coverage. But on the flip side, certain luxury cars still come with bulky premium rates. This compels car owners to cut out some of the important add-on covers to afford the hefty premiums, putting themselves at higher risk at the time of any casualty. 

It is important to understand that even the best car insurance in UAE needs additional covers that reduce the risk on drivers. No motor insurance is complete without some of these add-ons that cover additional risks that are not included in standard car insurance policies.

Some of these additional covers that are essential for the best car insurance in UAE are:

  • Replacement Car Cover
  • Personal Accident Cover
  • Roadside Assistance
  • Agency Repair
  • Off-road Cover
  • Oman Extension
  • Fire and Theft

Out of these add-ons, the replacement vehicle cover has emerged as one of the most popular add-ons to car insurance in the United Arab Emirates. Over half the car insurance policyholders chose to buy the replacement car cover costing approximately AED 174, along with their standard insurance in the past few years. The second most popular add-on was the personal accident cover, bought at an average cost of AED 120 by around twenty-seven percent of car insurance buyers. The other twenty percent of the buyers chose the breakdown cover for AED 47. 

Why is Replacement car add-on so popular?

There are two types of car insurance policies available in the market- a comprehensive insurance policy and a third-party liability cover. While a third-party liability policy is mandatory, that is, one must buy this cover in order to be able to legally drive on the roads in the UAE, it only covers third-party liability. 

On the other hand, the comprehensive policy covers not only the owner of the car and the car itself but also the third-party. It is advised to get add on covers alongside your comprehensive plan to enhance your insurance, making it the best car insurance in UAE. One such additional coverage is the replacement car cover. 

Though a comprehensive plan offers minimum coverage that necessitates a replacement car for those who were not at fault during an accident, after the new car insurance rules introduced by the Insurance Authority of UAE in 2017, the replacement vehicle add-on chosen by the buyers of best car insurance in UAE, however, provides replacement of the car to the owners regardless of whether the accident was their fault or not.  

As a result, most of the best car insurance in UAE are sold along with this add-on, making it mandatory for the insurance company to give you the compensation regardless of who was at fault. Buying the replacement vehicle add-on makes sure that your insurance provider offers you the alternative of getting a replacement car in the misfortune event of getting in an accident irrespective of the circumstances that caused the accident. 

The Benefits of the Replacement Car Cover:

This additional car cover acts as a courtesy car insurance device. The most important advantage of this additional cover is that it offers protection against those risks that are not covered by a standard comprehensive plan. For instance, if your car is damaged beyond repairs, or if it gets stolen, your insurance provider will provide a replacement car. This will enable you to enjoy the privileges of driving due to the replacement add-on. 

The replacement vehicle cover can be bought online once you have thoroughly compared the quotes from different insurance companies, allowing you to make a choice regarding the best car insurance in UAE. 

Here is a list of some other benefits of the replacement car add-on cover-

  • The benefits of this add-on cover are available to the customer 24*7
  • The customers can buy the GCC cover by paying for an additional insurance premium
  • The add-on cover is functional across the geographical borders of the UAE
  • The replacement car will be delivered to you based on your convenience and the location of your choice
  • If your car is beyond restoration or repair after an accident, this add-on cover will be applicable for a maximum period of 14 days
  • The insurance cover comes with a cushion period that provides significant time for you to figure out the most convenient replacement car for you based on your requirements. You have the option to select a second-hand or brand new car depending on your budget
  • Some of the best car insurance in UAE also offers the coverage for two additional drivers under this additional cover
  • The replacement car comes with enough fuel to help you travel to different locations, completing your personal and professional engagements without any hassle 

We recommend that policy buyers make sure to check the terms and conditions of the replacement car insurance add-on as the different features provided by this additional cover may differ depending on your car insurance provider. 

What are the exclusions of a replacement car add-on?

It is extremely important to go through the inclusions and exclusions of any insurance policy or additional cover you choose to buy so as to avoid any shock later when crisis hits. Here are the exclusions of the replacement car add-on:

  • The hire fees beyond the expiration of the cover- The replacement car add on insurance is applicable for a period of 14 to 21 days. If you choose to hire a car beyond this stipulated time limit mentioned in the insurance plan, you will have to pay the charges out of your own pocket. Thus, make sure to check for this exclusion before you buy the best car insurance in UAE.
  • Making the claim beyond the deadline- As mentioned above, there is a timeline beyond which the clients cannot make a claim for a replacement vehicle cover. In case you make the claim after the deadline has passed, the insurance company can refuse to entertain the claim. Generally, this deadline is 5 days post the insured car is declared as a total loss by the concerned authorities. Making sure to carefully find out the deadline while you buy this additional cover will ensure that your plan is the best car insurance in UAE.
  • Charges levied by the hiring agency- Your car insurance provider is not responsible for making any fuel payments. If there are any extra taxes, charges or fines imposed by the hiring company, your insurance plan will not be offering coverage for that. So, try to be vary of these charges and pick the best car insurance in UAE accordingly. 

Who needs a replacement car insurance add-on?

Let us look at the certain conditions that make buying a replacement car add-on necessary:

  • If your car gets vandalised- Cars are often the easy targets of vandals. Once vandalized, it is difficult to restore the car to its previous state. In some cases, the vandalism is so intense that the car can be declared a ‘total loss.” To avoid spending huge sums of money in trying to get it restored, choose the replacement car add-on when buying the best car insurance in UAE.
  • If the car is stolen- If you fear that car is under the threat of getting stolen, it is best to opt for this additional cover to safeguard yourself in advance. Losing a car is a massive loss but it also hampers your convenience as you also lose your primary mode of transportation. So, getting a new car as soon as possible becomes imperative. But not everybody has those kinds of savings to buy a new car. In such cases, this add-on cover will offer you a replacement car and help you take a sigh of relief.
  • If the car is written-off- A vehicle can be written off for a variety of reasons. If you are unable to repay your car loan, your lender has the right to get his money back by auctioning off your car after the court’s order 

The Bottom Line

Buying an additional cover apart from your car insurance is not an unnecessary expense. These covers help enhancing your base cover, offering you tighter coverage and greater protection. Choose an additional cover based on your requirements after carefully evaluating the pros and cons of each to avoid making any mistakes. Drive towards your dreams with fewer worries and greater peace of mind!