The difference between Takaful car Insurance & traditional car insurance

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  • Dubai has one of the highest vehicle ownership rates in the world, not to mention all of the additional visitor cars that enter every day.
  • Everyone needs car insurance to protect themselves, their loved ones and their vehicle(s).
  • Takaful car insurance is a type of insurance that offers sharia-compliant protection that won’t require religious compromise.
  • Non-takaful motor insurance offers a range of options due to the size of the competition.

The chances are that if you live in Dubai, or indeed the United Arab Emirates as a whole, you are a driver. In recent years the RTA (Roads and Transport Authority) have revealed that Dubai’s vehicle density is one of the largest in the world. According to their records, as reported by Khaleej Times, “the average car ownership in Dubai is one for every two residents or 540 vehicles per 1,000 people whilst cities like New York, London, Singapore, and Hong Kong respectively has 305, 213, 101 and 63 vehicles per 1,000 residents”.

All of this means that while you might reach for the smart taxi app from time to time, you are far more likely to be a regular car renter/owner and therefore one of your primary home budgeting concerns will be related to your car insurance.

With such a diverse range of cars and owners in Dubai, it is no wonder recent years have seen a growth in Takaful car insurance, but what is the difference between that and ‘normal’ car insurance.

Why do you need car insurance at all?

Okay, okay, so we know you know you need car insurance, but haven’t we all found ourselves lamenting the ever increasing costs, proclaiming our prowess at driving and insisting that insurance should just be for ‘those other idiots on the road’ (it’s okay, we won’t tell anyone you feel the same!).

But just like our homes, lives and travel the adage ‘better safe than sorry’ applies every time. We cannot always protect ourselves and our family from unforeseen circumstances or the bad decisions of others, that’s why we have insurance so that the price we pay when things go wrong is more emotional than financial.

When it comes to driving in Dubai, the accident level did fall slightly in the first six months of 2018, but there are still plenty of common errors that you will have seen every day on the roads that could result in damage or even injury:

  • Tailgating was the cause of 317 accidents (268 injuries)
  • Failing to leave a safe distance was the cause of 235 accidents (179 injuries)
  • A misjudgment by drivers was the cause of 132 road crashes (140 injuries)
  • Entering the road without ensuring that it is clear was the cause of 76 incidents (60 injuries)

So what is Takaful car insurance?

Takaful comes from the concept of Islamic jurisprudence and as such is grounded in “Muamalat” the basis of Islamic law that covers commercial dealings. Primarily, it provides for a co-operative system of reimbursement or repayment in case of loss. Its evolution grew out of a belief for some that traditional insurance concepts foster forbidden riba (usury) and gharar (excessive uncertainty)  and that therefore Takaful motor insurance could provide a sharia-compliant alternative that would prevent religious compromise to achieve security.

While the outcome to the customer is similar to traditional car insurance provisions, motor Takaful is a co-operative system in which members make shared contributions, and returns are managed via mutual cooperation for the good of all members.

This seemingly more altruistic approach appears to be appealing to consumers as the global Takaful insurance sector is expected to have surpassed $20 billion by 2018; although the worldwide figure for conventional insurance remains well into the trillions.


  • Sharia, or Islamic, compliant
  • Takaful policyholders maintain the right to share in the surplus that accrues from proper management of a Takaful fund (as per Gulf News.)
  • Community well-being, optimizing operations for affordable risk protection
  • Funds are only invested in sharia-compliant businesses
  • Mandatory for those receiving loans from Islamic Banks
  • Innovative customization options available


  •  Less well established than legacy insurance companies
  • Smaller in scope

Traditional car insurance

Well, the reality is that it is now somewhat redundant to refer to non-Takaful car insurers as only ‘traditional.’ While several well-established names in the industry have been around for over 100 years, the growth and power of the market have meant that even these brands have embraced the changes necessary to continued success.

Even the most long-standing providers have understood that today’s modern consumer prioritizes convenience and price and so industry competition has resulted in far greater flexibility for customers in the type of policy they need, including customization, quicker access to obtaining the right policy (mere minutes in some cases) and a far more appealing cost that won’t just grow like a weed every single year.


  • A lengthy legacy of performance and stability
  • A wider range of options to choose from
  • Innovative flexibility and customization opportunities


  • Only TPL option is Sharia compliant

While both options are available to everyone, regardless of your religion, and traditional car insurers often offer sharia-compliant TPL insurance options, ultimately it comes down to personal preference and finding the best solution for you and your family.
At Aqeed, our priority is to meet your needs as the customer. That’s why we offer a range of choices, including comprehensive insurance and sharia-compliant TPL, so you can find the one that best suits your needs. Our partners Watania, Dar Takaful, Aman, and Salama provide expert advice and support, as well as flexible pricing, so you could even find yourself saving money on your car insurance!


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Aqeed is on a mission to help you become better at everything related to insurance. The articles are meant to enrich your knowledge about insurance so that you make the right choices. From the decisions you make to the options you take, you are In Sure Hands.

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