What is the Cost of Car Insurance in Dubai?
Dubai is one of the many countries where traffic laws are followed stringently and hence it is mandatory to have car insurance here. Although, the accident rate is quite low in Dubai, having a motor insurance policy is a sensible decision to ensure the car’s safety.
Every individual has different insurance needs and needs may vary depending on the types of car they own. Plenty of insurance companies in Dubai have joined the race of becoming the best car insurance company in Dubai by introducing products with advanced features. Therefore, it is important for the insurance seekers to know how their insurance premium drives, how to estimate the cost of car insurance in Dubai or other related things of car insurance in Dubai, in order to zero down on the right plan
In this article, we are going to discuss various factors that affect your car insurance price or how is car insurance Dubai price calculated.
How to Estimate the Cost of Car Insurance in Dubai?
Here’s a rough idea for calculating car insurance Dubai price:
For instance, if car value is somewhere between AED 10,000-AED 300,000, the starting car insurance premium will be 3%. Cars that cost less than AED 10,000, the average rate will be 3%. Cars that cost more than 300,000 AED, the average insurance rate will be 2.75%.
Also while estimating the cost of car insurance in Dubai, you can consider the below applicable surcharges as well:
|Age 23-25 years||25%|
|Age 25-30 years||15%|
|Age more than 30 years but less than 60 years||Subtract 10%|
|Driver’s license less than 1 year old||25%|
|For SUV or other four-wheelers||Subtract 10%|
|For Brand New Car||Subtract 10%|
|Sports Car||Add 20%|
|If registered in the Northern Emirates||Add 5%|
Factors Affecting the Cost of Car Insurance in Dubai
It is very difficult to give the exact cost of a car insurance policy in Dubai because it depends on a lot of factors. In case, you are planning to get your car covered and want an estimation for it, then keeping the following factors in mind will help:
The Cost of Your Car
Most obviously, the primary factor that decides the cost of vehicle insurance and the coverage amount of motor insurance is the value of the car. As per the set rules and mentioned above, the cars that have a market price of more than 300,000 AED, the average insurance rate applicable in Dubai is around 2.75%. For other cars which cost anywhere between 100,000 AED and 300,000 AED, the average rate of the insurance premium is 3%. For the cars that cost much lesser than 100,000, the average premium cost is evaluated at 3.25% of the car value. No matter which company you go for, this is the most basic premium that you will have to pay at an average.
The Age of the Driver
Apart from the price of your car, the car insurance cost in Dubai also depends upon the age of the driver. To get an estimate, you can simply add up to 25% of the basic premium rate that you are paying, if you are aged between 23 years to 24 years. If you are aged between 25 years to30 years, then you can add an average of around 15% to the premium amount. However, if you are aged between 30 years to 60 years, you can expect to get a 10% discount on the premium you are paying. Another pointer to keep in mind is that if your driver’s license is anywhere less than a year old, then you are expected to pay an additional rate of 25%.
Type of Car
The type of car you own also affects the premium that the insurance company will charge.
If you have a basic car, you will have to pay a nominal insurance premium. On the other hand, if you have an SUV, you will have to pay a higher insurance premium.
You must be wondering why?
It is because an SUV costs higher than a basic car. When it comes to the repair expenses for SUVs, they are on the higher side.
Old is Not Always Gold
When it comes to buying auto insurance, old is not gold. If you want to cover your brand new car, the insurance policy will attract a lesser premium. It is because the performance of a new car is at its peak. As a result, you will be less likely to file a repair claim.
On the contrary, if you buy car insurance for your vehicle that is more than 5 years old, it will cost you more. It is because the vehicle parts won’t be easy to find in case of replacement.
In case you want a courtesy car, which means that the insurance company provides you with a car during the time of repair of your car, you need to pay an additional amount. There are also various insurance companies, which end up offering a no claim bonus which can allow the additional discount to car-owners who have had no claim record throughout a policy year. Moreover, by paying an additional AED 120 you can opt for personal accident cover for the driver. An extra AED 30 will enable you to cover additional passenger as well.
What are the Different Types of Car Insurance?
When it comes to car insurance, there are mainly two types to be considered. The policy is either comprehensive or third party. A comprehensive plan has a lot more features, whereas a third-party policy provides very limited features but is a mandatory one. Let’s see what both of these insurance plans have to offer:
- Comprehensive Car Insurance: Most of the Dubai insurance companies for cars would advise you to take this policy and give you the best of deals on them along with elaborate features. Apart from protecting your car from damages like theft or fire, a comprehensive plan includes the third party liability cost as well. A comprehensive plan also provides various add-on features.
- Third-Party Insurance: A Third Party insurance plan is basic and is mandatory by the law. If you have a vehicle, you need to have this particular type of policy because even if you do not want to pay for your own damage in case of need, the law wants to make sure that you have enough to provide to the third party in case of an accident.
In a Nutshell!
With the right knowledge about the companies and factors affecting the car insurance cost in Dubai, you for sure find a deal that matches your needs and budget the most. While a comprehensive policy may feel like a big investment, in the beginning, it comes as handy, especially in times of accidents and meant for expensive cars. It is always better to get a comprehensive policy with add-on features that you may feel are the most suitable for you to keep away from spending a lot in case of an accident.