On occasion, car insurance policies can overlap and whilst this isn’t necessarily a problem, it can cause issues which are easily avoided. Proper planning means you should never encounter this predicament and ensure that your cover starts and ends correctly. In this blog, we’ll explore insurance overlap: explaining what it is and how you can avoid it so that your car insurance in the UAE runs smoothly.

What is Car Insurance Overlap?

Put simply, car insurance overlap is having two car insurance policies operative at the same time. It can be an easy mistake to make, or could even be a conscious decision as some people mistakenly think that they’ll benefit from double cover. This isn’t the case however. You can only have one policy respond to any claims, as we will explain later.

How Can Car Insurance Overlap Occur?

Car insurance overlap can occur in several ways. Here are just a few:

  • Purchasing a new policy to replace the current one upon expiry

Car insurance overlap can occur when switching to a new policy or insurance provider. Get the dates and/or timings wrong between expiry and renewal date and you can find yourself with an overlap of cover. Car insurance in the UAE usually expires at 23:59 on the last day of the policy period and renews at 00:00 (midnight) the following day (renewal date). For example, an annual policy starting 1 January 2022 will commence at 00:00 and expire 23:59 on 31 December 2022: renewing 00:00 1 January 2023. If cover is arranged to replace the current policy and is started on 31 December 2022, assuming that this is the date of expiry, this could mean that there is a 1-day cover overlap (31 December 2022).

  • Receiving Cover From Elsewhere

A frequent feature of auto dealership promotions in Dubai and the UAE is the bundled “free insurance” deal. Under this offer, the auto dealership provides complimentary insurance coverage with the purchase of a new vehicle. This sales incentive is particularly popular in seasonal promotions, like Ramadan and New Year and many consumers take advantage of the offer since it saves them the hassle and cost of sourcing their own car insurance in the UAE. If you decide to take up such an offer, it’s crucial to check on the details and the dates and keep track of them so that when the free period ends, you’re free to arrange your own insurance to pick up where the previous one finished. Get the dates wrong, and you’ll either have a gap in cover or an overlap: neither of which are ideal.

  • Merging Separate Policies to Arrange One Multi-Vehicle Car Insurance Policy

It can be more cost-effective and convenient for drivers in the same household who drive each other’s vehicles to combine their policies and insure them under the one “multi-vehicle” policy. This is a widely available car insurance in the UAE. It’s advisable to speak to all the insurers concerned and ensure you cancel cover and replace it with an alternative concurrently. Taking out a new or replacement policy does not lapse, cancel or invalidate the existing or previous one and so it will remain active until it is naturally due to expire if it was paid up.

So, What’s The Problem With A Car Insurance Overlap?

There are several reasons why car insurance overlap is not advised. One day may not cause a significant issue but any longer and you could be faced with the following:

Paying Too Much Unnecessarily

Probably the most obvious problem is overpaying premiums unnecessarily. Why pay for two policies when in truth you only need one? Let the policy you don’t require run on unnecessarily and you could be faced with an additional cancellation charge or penalty as well as the application of pro-rata refund only that can be subject to minimum premiums. Put simply, you won’t get all of your money back even if you can prove you had cover in place elsewhere and didn’t need this policy.

Two Policies Don’t Equal Double Cover

Paying for and having two policies in place covering the same risk doesn’t double the insurance protection you have as you can only file a single claim in the event of an accident. As such, only one insurer can deal with that claim. Having two insurers involved in the insurance of your vehicle can lead to issues when you come to make a claim, such as:

Difficulty in Securing Claim Approvals

Duplication of insurers means it can be difficult to register and file a claim and get them approved. As a rule, the insurance company who issued their policy first is responsible for covering the loss and handling the claim, although they are also within their rights to refuse on the grounds of breach of contract. Most policies have terms and conditions prohibiting dual insurance so if they learn of another policy in place, they could withdraw.

Delays in Processing Claims

Where there are two policies in place, either insurer could try to put the responsibility on the other to handle and settle the claim, causing unnecessary processing delays.

How Can You Avoid Car Insurance Overlap?

It’s simple to avoid an overlap of your car insurance by following some simple steps:

  1. Obtain your renewal terms or alternative quotation
    The first step is to get your renewal premium from your current insurer and if you’re thinking of changing, a quote or quotes from alternative companies. Ensure all quotes are on
    a like-for-like basis so you are making fair comparisons.
  2. Select and purchase your chosen policy
    Once you’ve made your choice, you’ll need to choose an inception date for the policy and pay the premium. Double-check the date is correct for the new policy to start to ensure there is no overlap with your current arrangements.
  3. Cancel your existing policy by giving notification of cancellation or lapse
    Advise your current insurers that you want to cancel your policy and confirm the effective date of cancellation. Make sure that this ties in with the inception date of your new policy.

A final word of caution. It’s unwise to try and switch Insurers mid-term. This can create all kinds of administrative headaches and you won’t receive a full refund of what you paid. Letting your policy run until renewal can avoid unnecessary issues and leave you time to consider your options.

About Author

Rachel Al Mughairi

About Author

With over 34 years in the international insurance industry in a variety of senior management roles, and as holder of the Diploma in Insurance from the Chartered Insurance Institute, Rachel surely knows her insurance! With experience in London, continental Europe and the Middle East, Rachel is here to share her knowledge and help you understand more about insurance products in this easy-to-understand series of videos and blogs.