- Comprehensive vs. third-party insurance in the UAE: their complexity explained.
- How to decide which level of coverage works best for you.
When it comes to selecting your car insurance policy, the road ahead can seem daunting. Technical jargon, optional add-ons and unexpected exclusions are just a few stumbling blocks on the way to picking the policy that best suits your needs.
At its simplest, car insurance in the UAE is mandatory for every driver by law and can be broken down into two categories: third-party liability and comprehensive.
Both are valid for 13 months (12 months plus one month’s grace period).
Third-party liability: not much to wrap your head around
The former is the cheapest option and if you cause any accident, your policy will cover the other party’s costs. This could involve anything from vehicle damage to hospital bills to infrastructure repair. However, the insurer will contribute nothing towards the repairs of your own car – which means the worse the accident, the more likely you are to take a major financial hit.
Third-party liability is the preferred choice for drivers who are low on funds, or who are confident in their ability to navigate the UAE’s roads safely. It is also the only insurance that most companies offer to cars which are more than seven years old.
Comprehensive insurance: widen the spectrum
Comprehensive insurance costs more but as the name suggests, offers drivers greater coverage in a wider range of scenarios. It’s often not much more expensive too, and spending a few hundred extra dirhams here could save you many thousands in the long run. Your insurer will foot the repair of your vehicle, even if you are at fault or if any unforeseen circumstances such as fire, flooding, vandalism and theft happen also.
Comprehensive car insurance is a necessity if a loan has been taken out of the vehicle. This option offers greater assurance for drivers with more expensive cars, or who spend significant periods of time driving (therefore statistically increasing their chances of an accident).
The importance of add-ons
When personalizing your car insurance coverage, add-ons are another potentially important consideration. A third-party liability policy can be bolstered to include fire and theft, and comprehensive policies can also be upgraded to incorporate areas such as cracked windscreens, extended Omani or GCC-wide coverage, lump-sum medical payouts and 24-hour breakdown recovery service.
Even if you’re happy with your comprehensive policy, and refuse to pay another dirham on top, it’s still wise to learn the difference between standard areas of coverage and those that that are classed as additional benefits.
Elsewhere in your policy, it’s advisable to check your excess. Also known as a deductible, this is the sum of money the driver must pay in the event of a claim, with the insurance company footing the remaining costs. Although this won’t be a bank-breaking figure, be aware that the cheaper the policy, the higher the likely excess.
Caution! Even if you possess the finest car insurance policy in the UAE, it will be rendered null and void if you’re involved in an accident while under the influence of alcohol – whether it was your fault or not.