New UAE motor insurance rules mean you will get a courtesy car after an accident

The unified regulation will be applied to the active 3 million vehicle insurance policies in the country. Pawan Singh / The National

Drivers will from next year be provided with replacement veh­icles after an accident, one of several new benefits included in new motor insurance rules for the UAE, introduced by the regulator on Wednesday.

A nationwide unified vehicle insurance policy means it will be mandatory for insurance companies to provide policyholders with compensation equivalent to the cost for a replacement car after an accident for a maximum of 10 days and a value of up to Dh300 per day, according to Ibrahim Obaid Al Zaabi, the director general of the Insurance Authority.

A replacement, or courtesy, car – or cash for a rental – is sometimes provided when a vehicle is under repair, but until now this has been entirely dependent on the type of policy and insurer.

The new regulation brings both civil liability, or third party, cover, and comprehensive loss and damage cover, into the same policy. The unification results in many more benefits being provided to policyholders, Mr Al Zaabi said. Motorists will also see liability coverage extend to husbands, wives, children and parents, as well as a sharp increase in cover for property destruction. Damage inflicted on property belonging to others in a vehicular accident is now insured to a maximum of Dh2 million from Dh250,000. The regulation also allows for good drivers to obtain discounts on their insurance premiums and drivers with poor records to be made to pay more, according to Mr Al Zaabi.

“The Insurance Authority has worked on achieving the highest level of fairness and transparency in the unified regulation in line with the requirements of policyholders, companies and the interests of the dom­estic markets and the national economy at the same time,” Mr Al Zaabi said on Wednesday.

The unified regulation will be applied to the active 3 million vehicle insurance policies in the country, according to 2015 data, and also aims to iron out a number of kinks in existing policies such as clarification about when a car must be written off by an insurer. It also introduces the ability of insurers and their customers to resort to experts to resolve disputes. The premiums insurance companies get from vehicle policies in 2015 reached Dh5.6 billion, comprising about a fifth of all total insurance premiums, according to the Insurance Authority.

“The new regulation supports the legislative base of the insurance sector of the UAE and entities operating therein,” economy minister Sultan Al Mansouri said in a statement. “It increases the sector’s competitiveness at the regional and international levels in accordance with the best international best practices.”

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