If your UAE car insurance renewal is coming up, then reassess your policy to ensure you are not spending more than you have to.
This is more relevant now as the UAE’s Insurance Authority implemented a new set of car insurance regulations on January 1. While the key changes – detailed in the infographic above – are generally positive for drivers, insurance premiums will go up as a result. For example, while it was previously possible to get a comprehensive policy for a sedan or SUV starting from Dh1,050, the new rules have set minimum comprehensive rates at Dh1,300 for sedans and Dh2,000 for SUVs.
All is not lost though. You can save a significant amount on your policy by following a few simple steps. The National has teamed up with the online home services marketplace, ServiceMarket.com, to bring you six tips on how to save money on your motor insurance in the Emirates.
1. Get multiple quotes and compare
You can save up to 50 per cent by getting quotes from different car insurance providers and comparing policies. Policies bought through car dealerships or banks can sometimes be more expensive so it’s a good idea to check your options. After all, no one insurance company has the best deals for all customers. Most insurance providers cater to a certain segment of customers and cars, so it is important to find the policy that best suits you.
2. Leverage your no claims discount
Your driving history plays a big role in determining how much you have to pay for your car insurance policy. If you are a careful driver and get a no claims certificate from your current insurance provider to prove this, then you can get a better rate when you renew your car insurance. “You can save 5 to 20 per cent by providing a no claims discount (NCD) certificate at the time of renewal,” says Emre Guclu, head of insurance at ServiceMarket.com. “For a 2015 BMW 528i worth Dh140,000, insurance providers could quote Dh3,700 if you don’t have an NCD, but with a three-year NCD they would reduce it to Dh3,300.”
3. Consider add-ons carefully
For each add-on you include in your policy, you will typically have to pay a higher premium. Adds on options include off-road coverage, roadside assistance, agency repairing services, coverage across the GCC, rental car, personal accident cover and personal accident cover for passengers. Consider each add-on carefully before topping up your cover. For example, if you only drive in the UAE and don’t take part in off-road activities, then you might want to drop GCC and off-road coverage.
4. Get an accurate estimate of the car’s value
Many make the mistake of overestimating the value of their car and end up paying a higher premium than they have to. Depending on the policy’s wording, an insurer might not be obliged to pay the full declared value (in case of a total loss accident) if it is found to be above market average. To get an accurate estimate of your car’s worth, browse classified sites or get a quote from a dealer. Most cars face an annual depreciation of around 15-20 per cent depending on the model. Pick a low but accurate value to save money while also ensuring the car is covered.
5. Increase your excess
You can reduce the cost of your policy by increasing the insurance excess, which is the amount you will have to pay towards any claim. “If you have confidence in your driving abilities, you should select a higher excess,” says Mr Guclu. “The disadvantage is that smaller repairs will become more expensive for you as the customer. The benefit is that you get a better rate. If you accept a higher excess, you can also get more quotes from car insurance companies. For example, some companies will not offer a quote for coupés with standard excess, but they will provide a quote if you accept a higher excess.”
6. Buy your car insurance online
You can often get up to 10 per cent off the same car insurance policy just by buying it online via a comparison website or on the insurer’s website. To understand how the insurer calculates your quote, Mr Guclu says the premium is always equal to the car’s value multiplied by the rate. Therefore it is better to declare a lower car value since total loss accidents are comparatively rare, he adds. “Many people do not realise that for regular repairs the car’s exact declared value does not matter,” he says. So what key factors determine the rate? According to Mr Guclu, it’s the driver’s age and experience, the car’s age, body type (coupé, SUV, etc), make and model, your no claims discount and agency repairs. Voluntary excess can also bring down the premium.
Follow us on Twitter @TheNationalPF