Most people seeking car insurance in the UAE often wonder why the quotes vary so much. Since car insurance is amongst the most commonly acquired, it is no surprise that several companies offer various different levels of cover and price options in Dubai.
Listed below are key reasons for the difference:
1.The type of vehicle is one of the key factors in determining the premium for your car insurance. For example, a standard car will have a relatively lower quote, as compared to a luxury car. And something exorbitant like a sports car will invariably attract a higher premium because of the high repair costs and the high performance nature of these models.
2.While insuring a luxury vehicle, it is best to choose an insurance company which offers a high level of protection, good customer service and prompt claim settlement. Infact, certain insurance companies specialise in luxury and high value vehicles, so ensure you explore your options.
3.An insurance cover that includes repairs at authorised dealers” workshop may be priced slightly higher than an insurance cover which has a non-dealer repair option.
4.Drivers below 25 years are often charged a higher premium. This is due to the fact that the insurance companies experience a high loss ratio for this segment. Driving experience and the claim history are an important factor in premium determination.
5.Most insurance companies offer a comprehensive and a third party cover. A few multinational insurance companies also offer an executive product which has premium covers and is priced slightly higher than a regular comprehensive cover.
6.Each year the car value depreciates anywhere between 10% to 20%. The premium is calculated on the value of the vehicle and therefore the premium would reduce proportionately. On the other hand, repair costs remain fairly static or may even increase due to inflationary factors. To balance the difference, insurers will impose a minimum premium or increase the premium rate as the car value falls. Many insurers offer comprehensive cover to cars until 5 to 7 years depending upon the insured”s claim history.
As an informed customer always ensure that you check the car insurance quote, read the policy documents and understand the covers when you purchase any motor insurance policy.