Car insurance in Dubai is an essential for drivers in the emirate, and the premium you pay will depend on several factors. These typically include your age and driving history, as well as the car’s make and model along with its year of manufacture. Answer accurately, pay the agreed price, and you should be OK if you need to claim you car insurance after an accident, or if your car is damaged or stolen.
There are, however, some common mistakes that might make your insurance company terminate your policy mid-term or refuse to pay out in the event of a claim. Before we discuss how a cancelled insurance policy or nullified car insurance claim can affect you, let’s take a look at some of the scenarios that can put you in a difficult spot.
Disobeying the Traffic Laws
Have you ever had an issue with the authorities over traffic rule violations? While the severity of these violations varies, penalties for jumping traffic lights and getting speeding tickets might have already caught the attention of your car insurer, flagging you as a high-risk driver. The most serious issues, such as driving under the influence of alcohol, leading to suspension of your driving licence or to jail time, can give your insurance company substantial reasons to cancel your policy.
Leaving the Car Unlocked
One of the most common motorist mistakes is to accidentally leave the car unlocked. This puts the vehicle at a greater risk of theft and vandalism, and insurance companies may protect themselves against your carelessness in the policy fine-print. If it is found that your car was stolen or damaged after being left unlocked, your insurance company can refuse the claim.
Ignoring Repairs and Maintenance
The UAE’s safety rules state that every car must be maintained in good roadworthy condition at all times. Car owners are expected to send their car away for regular maintenance and have any faults repaired without delay. Insurance claims on cars are only valid if they are made for a well-maintained vehicle. If you are ignoring an obvious problem rather than getting it checked, you may not be insured.
Using Your Personal Car for Business
Most car insurance policies clearly state that the insurance coverage is limited to the driver’s private use of the vehicle. If your personal car is found to be in use for business at the time of an incident, then your claim could be rejected. For business uses, it is necessary to have a commercial vehicle license.
Lending Your Car to a Friend
As per the Insurance Authority, any UAE resident who is above 25 years old and is holding more than 1 year of driving experience can drive and in case of an accident, the insurance company will be liable to pay. However, if any one of the conditions is not met, then 10% of the claim amount will be paid by the insured in case of an own fault claim/accident.
Undisclosed Car Modifications
Undisclosed car modifications that affect the performance, safety or value of your car can result in car insurance policy cancellation. In this scenario, the best plan is to inform your insurer about your modification plans. This also allows you to review your policy coverage and understand what is included and excluded in your policy. In this instance, also be wary of modifications carried out by a previous owner.
Committing Insurance Fraud
This one should go without saying – deliberately falsifying a claim to defraud the insurance company can land you in extremely hot water. Obviously, if the insurer realises that a claim is fabricated in an attempt to obtain money dishonestly, your car insurance policy will be terminated with immediate effect. However, that’s just the start of your troubles. Insurance fraud is a criminal offence, and is likely to result in a prison sentence or a substantial fine.
What does it all mean?
Inevitably, some drivers will deliberately ‘forget’ to inform their insurance company of details that might increase their premium, and thinking they will get away with it. That’s a risky decision – insurance companies know all the tricks and are watching out for them.
The current UAE law states that insurance companies can cancel the ‘own damage’ section of a comprehensive car insurance policy after giving 30 days of prior notice to the policyholder. In such cases, the paid-up premium is refunded back to the policyholder, after deducting a proportional amount for the time the policy was active.
However, the insurance company doesn’t have to think you are being dishonest. Even a seemingly innocent slip-up can cost you a claim rejection or policy cancellation, making you liable to pay for any damage, repairs, and in some cases medical expenses from your own pocket. If you damage other people’s property in an accident that is your fault, or other people are injured, you pay for them too.
The important point is to make sure you read the policy document carefully, be aware of all the conditions, and make sure you are complying with the rules. If in doubt, check with your insurer for clarification – and get that in writing.
Ignorance is not the answer when it comes to taking a car insurance policy. Every policyholder must be fully aware of their policy details, and act accordingly with their ‘insured asset’ – in this case, their car.