Is Car Insurance Mandatory In The UAE?
Finding a reliable car insurance plan is a fundamentally important undertaking when you purchase a vehicle in the UAE. Choosing car insurance can be a tedious and time-consuming process due to the various plan options available in the market. While having a lot of choices to select from, is desired, likewise, it also increases the level of confusion in buying the apt car insurance for your needs… There are two primary sorts of car insurance plans accessible in the UAE – third-party car insurance that offers partial coverage and comprehensive car insurance that offers full coverage against any kind of damages or losses
What Is Third-party Car Insurance?
A Third party car insurance plan only covers the damages caused to third-party vehicles and the injuries sustained by the driver. The injuries sustained by the third-party driver including death and disability are covered in this policy as well. The vehicle damages incurred due to any self or external mistakes are not covered by this plan. These include damages such as accidents, theft, or man-made and natural perils.
What Is Full Coverage Car Insurance?
Comprehensive car insurance also known as full coverage covers the damages to both parties involved. This means this insurance covers the repair expenses of your vehicle, the cost of any emergency treatment if required, and any property and personal damage to the third party. Along with this, comprehensive or full coverage insurance also covers the car in case of any damages caused by man-made disasters, natural disasters, theft, etc. Comprehensive insurance can be customized based on the needs of the client.
Which Insurance Is Mandatory In The UAE?
It is important to have valid third-party liability car insurance in the UAE. This means that every individual in the UAE must have a valid third-party car insurance cover. Even though full coverage or comprehensive car insurance is not mandatory, it is highly recommended. Due to the complexities of the different types of options available for car insurance, it is highly recommended that you go with a well-reputed insurance brokerage firm, such as Gargash Insurance.
Which Insurance Cover Should You Opt For?
Comprehensive car insurance offers wider coverage, but the premiums are also higher. Premiums for new cars are higher due to the higher market price.
Full coverage or comprehensive car insurance is ideal when a new car is purchased. You can check with your insurance brokerage company to get a better understanding of both plans.
According to Pitstop Arabia, some of the best insurance providers in the UAE are RSA Insurance, GIG Insurance, Adamji Insurance, Al-Wathba Insurance, and Arabian Scandinavian Insurance as are listed with some certified A list workshops (ESMA Certified) such as Gargash Auto, Swiss Auto, etc.
Overview of Third Party and comprehensive car insurance
|Parameters||Third Party car insurance||Comprehensive car insurance|
|Coverage||Covers third-party liabilities caused by the owner/driver of the vehicle||Covers both third-party liabilities and own damages. It also covers losses incurred due to man-made and natural disasters|
|Requirement||Mandatory for all vehicles registered in the UAE||Ideal for a new car, not mandatory as every vehicle will be having partial coverage|
|Limitations||Does not provide cover for own damages and injuries||Depends on the policy|
|Cost||Cost – effective||Slightly expensive when compared with partial car insurance|
|Customization||No||Yes, based on availability|
|Road-side assistance||No||Yes, you can also opt to remove it as per your requirement|
Factors To Consider When Buying Your Car Insurance
- Age and type of the car: If you have purchased a new car and/or premium vehicle, it is ideal to opt for full coverage car insurance to ensure you are also covered in case of any damages caused due to natural and man-made disasters.
- Your needs: If you have specific needs such as going on the off-road cover, Oman cover, etc, it is ideal to opt for comprehensive car insurance cover as you would be able to customize your car insurance plan by opting for add-ons.
- Budget: Car insurance premium in UAE depends on several factors like the value of the car, type of car insurance chosen, the extent of coverage, etc. It is important to be mindful of your budget and align your needs accordingly while buying a car insurance plan.
- Driving history & conditions: If you work or live near an area prone to accidents or breakdowns, or are generally prone to getting into accidents, consider getting a comprehensive car insurance plan. Alternatively, if you are a cautious driver, you should take advantage of the no-claims bonus, you can speak to a trusted insurance broker to know more about this.
To sum it up, it is mandatory to have valid car insurance when driving a car in the UAE. Third-party car insurance is the minimum requirement as per UAE laws. tr. However, it is ideal to understand both third-party and comprehensive car insurance plans and make the right choice based on your requirements. Consider both the options and choose the plan that suits your unique needs & requirements