If you’re buying a new car or looking for car insurance, it’s essential to understand the common types of Car Insurance Coverage available in a car insurance policy in Dubai. There are various types of motor insurance designed to protect your car, passengers, and yourself if you’re involved in a car accident.
If you are buying car insurance in Dubai, you should know that there are mainly two core options, but the type of car insurance in UAE you choose can vary based on coverage depth and add-ons. Understanding the different types of car insurance available helps you make a more informed decision.
Let’s take a look at the types of car insurance available in Dubai.
Comprehensive Car Insurance Policy
A comprehensive insurance policy protects you against third-party loss or damage as well as damage to your own vehicle.
Coverage details
This policy covers loss or damage caused by:
- Burglary or theft
- Fire and external explosion
- Accidental collision
- Lightning and self-ignition
- Malicious acts by third parties
Typically, a comprehensive insurance policy also covers:
- Theft and vandalism
- Natural disasters (such as hurricanes)
- Falling objects
- Damage caused by animals
- Certain types of civil disturbance (like a social riot that results in damage to your car)
Insurance companies in the UAE are legally obligated to offer comprehensive car insurance at a premium ranging between 3% and 5% of the car’s value.
When buying this type of car insurance in UAE, it is important to thoroughly review the policy documents to ensure all coverage details and exclusions are clearly stated. To confirm exactly what is covered and what is not, consult your insurance provider directly.
Third-Party Liability Policy (Mandatory by Law)
Third-party liability insurance is the most basic form of coverage and is mandatory under UAE law.
What it covers
- Death or bodily injury to third parties
- Property damage caused by the insured vehicle
This policy does not cover any loss or damage to your own vehicle unless the other party is at fault, in which case you must claim through their insurance provider. Fire and theft claims are not covered under this policy.
If you are looking for broader protection, you should consider exploring other types of car insurance available in the market.
Must read: Should I purchase comprehensive or third party car insurance?
Third-Party Liability Insurance (Theft and Fire Coverage Included)
This option is an add-on to basic third-party liability insurance and includes theft and fire coverage not included in standard third-party policies.
If a basic third-party liability insurance policy only provides coverage for third-party damage, you can enhance it by adding:
- Theft coverage
- Fire coverage
Please note that opting for these add-ons will increase the premium cost.
Comprehensive Car Insurance Policy with Add-ons
This variation of comprehensive insurance includes all standard coverage while allowing you to enhance your policy with additional benefits.
Common add-ons include:
- Dealer or agency repairs
- Free hire car
- No-claim bonus benefits
- Free insurance coverage across GCC countries
The premium for this type of motor insurance typically ranges between 3% and 10% of the car’s value, depending on the insurer and whether a no-claim bonus is applied.
Premium Comprehensive Policy
Premium comprehensive insurance is the highest level of coverage available in the UAE.
- Designed mainly for sports and luxury vehicles
- Offered to a limited group of clients
- Covers almost every aspect of car insurance protection
This policy typically requires an additional 1% to 2% premium. If you own a luxury vehicle, this type of car insurance in the UAE is worth exploring for its extensive coverage.
Factors That Affect Car Insurance Premiums
Once you are familiar with the various types of car insurance, it’s important to understand what affects premium pricing. Factors include:
- Driver age (drivers below 25 years may face higher premiums)
- Car brand, model, and year of manufacture
- Whether the vehicle is a sports, luxury, or older car (more than five years old)
High-performance, luxury, or older cars typically cost more to insure.
Final Thoughts
There are several types of motor insurance available in the UAE, and choosing the right one is a long-term financial decision. It is important to review each policy carefully, compare coverage options, and consider your car’s brand, model, and age before making a decision.
InsuranceMarket.ae works with the best car insurance providers in the UAE. Visit today to get the best car insurance deal for your car, compare policies, find the right Car Insurance Coverage for your vehicle, and drive with peace of mind.
