Drivers need to be up to speed with insurance rules

Many UAE drivers are unaware of their legal right to a replacement car from their insurer after an accident for a maximum of 10 days or a pay out of up to Dh300 per day for a rental. Silvia Razgova / Show more

ABU DHABI // With road safety a serious concern in the country, drivers are being urged to make sure they are adequately insured before getting behind the wheel.

Motorists often select their insurance based on the cost of premiums, opting for third party liability (TPL) or comprehensive policies without properly considering the fact they could be saddled with huge bills in the event of an accident if not properly covered.

"Many don't understand the benefits of the comprehensive insurance," said Emre Guclu, head of insurance at ServiceMarket.com, an online home services marketplace.

“If you have TPL insurance, your car is only covered if you are not at fault for the accident. If you cause the accident, then you will have to pay out of your pocket for the repair cost. If you have comprehensive insurance, your car is covered even if you are responsible for the accident.”

Last month, a number of crashes were caused by speeding, wrong overtaking, sudden swerving, and entering a road without ensuring it was clear.

Many UAE drivers are unaware of their legal right to a replacement car after an accident for a maximum of 10 days or a pay out of up to Dh300 per day for a rental.

“Similarly, many don’t understand that they can be compensated for damages to their own vehicle, even if they only have third-party coverage, provided they’re not at fault,” Mr Guclu said.

UAE drivers must take time to understand exactly what their insurance policy covers before they make the purchase to ensure that they are properly covered and are not paying more than they need to.

“For instance, if you plan to drive within the GCC, make sure your policy has GCC cover, otherwise you will end up having to spend more in the future,” Mr Guclu said.

Many people think it’s better to insure their car for a high value although the probability of having a total loss accident is very low - about 1 per cent, Mr Guclu said.

“For regular repairs the car value doesn’t matter, and since the cost of your policy is directly related to the specified car value, it makes sense to declare a lower car value when purchasing your insurance. That said, the declared car value should be a realistic one.”

Over-insuring a car will not even guarantee you a higher amount in the case of a total loss as most insurers reserve the right to base the total loss payment on a reasonable valuation of the car and trim, said Frederik Bisbjerg, executive vice president of Qatar Insurance Company.

“This means that if a car is over-insured by 20 per cent, for example, the insurer might claim there is no evidence that the value of the car was this much and thus pay out a lower amount,” he said.

Although statistically the number of total losses are insignificant, for most high-value cars repair costs are high, Mustafa Vazayil, managing director of Gargash Insurance, warned.

“In such a situation, if the insured vehicle is undervalued, the owners will be at a disadvantage,” he said. “The insurer can declare total loss if the vehicle repair cost exceeds 50 per cent of the insured value.”

A tough new regime of fines will be introduced on July 1, and insurance companies can help to encourage safe driving behaviour.

“Insurers are already rewarding safe drivers in the sense that you will get discounts on your insurance renewals if you don’t have any claims,” Mr Bisbjerg said. “We at QIC Insured have partnered with Road Safety UAE to inform drivers about road safety and safe driving.

Drivers can save up to 20 per cent by using a no-claims certificate, a great incentive to drive safely, according to Mr Guclu.

“Insurance companies can also take a more hands-on approach such as installing boxes in their customer’s cars to monitor elements of driving such as their speed, and how harshly they brake,” he said.

“Customers can see how their driving is rated at any time, and their insurance premium is calculated based on how well they drive over the year – giving them great motivation to drive better.”