Gulf News November 7, 2009
08 November 2009
Gulf News: "Getting Motor Insurance in the UAE"
Q. Having just spent the last weekend at the F1 in Abu Dhabi and watching the race, it struck home how important it was for me to make sure my car insurance was fully comprehensive. I’m 25, male, and I’ve just bought a sports car first registered in 2000, what steps should I take to ensure I’m fully covered?
Watching cars speed past at more than 321 kilometres per hour (kph) is an exciting way to spend the weekend, especially if you have been lucky enough to actually attend the F1 race in Abu Dhabi.
But you are probably not the only one watching the race who had the morbid thought of the devastation that would be caused if the cars crashed. Even at speeds of under 60 kph, the damage and destruction that can be caused by two motor vehicles being involved in a collision can be dramatic.
Costs for repairs can run into thousands of dirham’s, in the event of a death of a third party as a result of the motor accident, ‘Diya’ blood money by law will need to be paid, the cost of immediate medical treatment, as well as other costs for such treatments as on-going physiotherapy for whip-lash which is a common crash injury.
Given your young age, and the fact that you have a sports car that is more than five years old, you may find it difficult to obtain motor vehicle insurance, especially at a low cost. The best thing for you to do is consult an Independent Financial Adviser who can guide you on the best policy and ensure that you have adequate motor insurance, liability insurance and health insurance to cover any injury due to a motor vehicle accident.
There are a few basics to consider first – and the most important is that insuring your car is mandatory in the UAE. Secondly, premiums are calculated according to the year, make and model of the car, age of the driver, claims history and value of the motor vehicle.
A rate of between 3 % and 8 % per annum is considered to be a competitive price. Policies normally include 24/7 accident and recovery service, third party cover for family members with the driver receiving personal injury cover, guaranteed repairs, off-road cover, and medical expenses in an emergency situation.
Third party cover is cheaper, but will only cover the costs of other people’s injuries and damage to their vehicle or property. If you have taken a loan out to buy your motor vehicle, then most banks will insist that you have comprehensive cover because it protects the asset, the car.
Expatriates, who can present an original no claims bonus certificate from their previous Insurance Company or Insurance Broker, may be eligible for a discount on their motor insurance premiums, which can range from between 0% to 40% depending on their claims history.
You should also remember to re-assess your health insurance when you buy or hire a car. As mentioned earlier comprehensive car insurance will cover you for any emergency medical care needed. But if you sustain long-term injuries that require on-going treatment, then this will need to be covered by your medical insurance.
The chance of sustaining a permanent disability may also lead you to review require your critical injury cover, which will pay out if you sustain an injury that prevents you from working, and earning, at your original capacity.
Remember though that all car insurance policies become null and void if you have an accident under the influence of alcohol – so the final piece of advice is to get yourself adequately protected, and drive safely.
By Samantha du Plessis, Team Leader General Insurance at Nexus Insurance Brokers L.L.C.