Solving the confusion around UAE car insurance

30 per cent of UAE drivers do not know what level of cover they are signing up for when purchasing a car insurance policy, a new study has found.

Car insurance: we all need it but we don’t all necessarily understand it. Or at least that’s what the latest survey from the finance comparison website compareit4me.com has found.

A recent survey from the site found that 34 per cent of UAE residents believe they can claim on their car insurance for any damage that naturally and inevitably occurs as a result of general usage, such as worn brakes or a faulty exhaust.

More often than not, however, car insurance policies do not cover the replacement of auto parts that deteriorate with time and use, such as brake pads and tyres.

Similarly, 30 per cent of drivers in the UAE do not know what level of cover they are signing up for when purchasing a car insurance policy - an alarming statistic in itself.

We’re all guilty of failing to read the small print, or simply renewing a financial product or policy for convenience, so here, Sonja Stephen, editor at compareit4me.com, offers some tips to help solve the confusion around car insurance:

Shopping around

You wouldn’t buy the first car you test-drove so why would you agree to the first car insurance policy presented to you? I can’t stress enough the importance of shopping around for any financial product; if not for potentially saving money then at the very least to ensure that you have the best, most suitable policy for you. The same sentiment applies to renewals. Nearly 50 per cent of respondents to our survey said they stick with the same insurer when it comes to renewal, while nearly two thirds of consumers believe that they would save money on their car insurance if they stayed with the same insurer. In fact, the opposite is true – often insurers will take advantage of drivers who simply renew by inflating policy renewals.

Understanding the small print

Failing to read the small print, or interpreting it incorrectly, could present a problem when it comes to making a claim. For example, does your policy cover accident and breakdown, or just accident? What is its geographical scope? If the car windscreen smashes, will the insurer cover it? Before you sign up and commit to any policy, make sure you set some time aside to read through your insurance document, making notes of any terminology you don’t understand. No question is too silly. Also hidden in the small print you might find extra policy benefits (or exclusions), additions to the policy that can be deleted to save some money, stipulations for certain manufacturers in the event of repairs, and even where you park your vehicle in the event of a claim.

Breakdown cover is not automatic

Something a compareit4me team member unfortunately discovered last week is that her policy does not cover breakdown – a slight inconvenience when her car broke down at the entrance to Dubai’s busiest mall. What is the moral of this story? Understand your policy. Some insurers only cover accidents, not breakdown (depending on the policy). In the above case, do you have a number for an alternative recovery team? Which garage will your vehicle be repaired at? How much will this cost and how can you get this covered by an insurer? Again, the devil is in the detail so make sure you read though the paperwork before signing up for a 12-month policy that might not be right for you or your car.

More broadly, our survey found that UAE residents understand the factors that car insurers consider when calculating their insurance premiums, such as vehicle type, length of driving experience, accident history, age and where the applicant lives. Perhaps the same know-how should be be applied to understanding what you are covered for.

pf@thenational.ae

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