Dubai is a place where traffic laws are followed very effectively and hence it is mandatory to have car insurance here. Although, the accident rate is quite low in Dubai, having a car insurance policy is a sensible decision to ensure the car’s safety.
Every car and every owner has very different needs. There are plenty of insurance companies in Dubai which tailor insurances as per your needs. However, one may feel that how the premium of their car insurance policy is calculated. In this article, we are going to discuss various factors that affect your car insurance policy and how it is calculated in Dubai.
What are the different types of Car Insurance?
When it comes to car insurance, there are mainly two categories in which they are divided for automobiles. 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.
How to estimate the car insurance cost 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 a car insurance plan and want an estimate for it, then the following factors need to be kept in mind:
The Cost of your Car: Most obviously, the primary feature to decide the cost of the premium and the coverage amount of car insurance is the value of the car. As per the set rules, the cars that have a market price of more than three hundred thousand AED, the average insurance rate for them 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. Additionally, the premium cost is also evaluated keeping the following factors in mind:
The Age of the Driver: Apart from the price of your car, the premium 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%.
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 drivers who have had no claim record throughout a policy year.
In a NutShell
With the right knowledge about the companies and factors affecting the premium 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 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 from spending a lot in case of an accident.