- Car insurance companies in the UAE choose whether the cover they offer policyholders provides for accident repairs to be conducted at car dealership’s service network (agency repair) or independent workshops (non-agency repair).
- Researching the impact of non-agency repair on your car’s warranty status is essential.
Agency repairs are often considered as safer and less likely to impair your vehicle’s residual value when it comes time to sell.
- Most car insurance companies do not offer agency repair when cars are more than 5 years old.
Let’s face it; car insurance is not the most exciting subject in the world. A lot of us see it as a side-note or formality required to complete car registration and do not even give it a second thought after the car registration process is completed.
This is generally the case until bad luck strikes, and the car owner becomes involved in a car accident or damages his/her car in some way. In that unlikely event, suddenly the choice of an insurance company and insurance policy becomes more significant, determining how and where your vehicle is repaired.
Always remember that researching your car insurance and finding the most competitive quote will save you a great deal of money and headache, the online Car Insurance quote generator on our website can help you with this.
Car ownership: the numbers
The number of cars in the UAE has steadily increased year on year. Publicly available Transportation and Logistics data issued by the UK government and data obtained from Dubai’s Roads and Transport Authority (RTA) open statistics center, provides an interesting comparison of car ownership in the two cities, particularly when you consider that the population of London is more than double that of Dubai’s.
What is agency repair in car insurance?
In the world of car insurance, the term ‘agency repair’ provides you an assurance that in the event of any damage to your car, all repairs will be conducted at the official service network of the car’s dealership. There are several factors of varying degrees of importance when it comes agency repair that you should consider, these include:
In 2016, the UAE’s Ministry of Economy issued a directive revoking the compulsory maintenance of a vehicle at a car dealer’s workshop as an essential condition of the vehicle’s warranty. What this means is that maintaining a vehicle at an independent garage rated by the Ministry of Economy, should not void your warranty. The timeline for the implementation of this directive is set to last around 2-3 years, and whether or not this will apply to more complicated accident repairs is unclear.
As vehicles become more complicated, they increasingly rely on proprietary technology and methods, meaning that your own vehicle’s warranty may be rendered null and void in the event of non-agency repair.
An integral part of car ownership is maintaining your vehicle’s residual value. This maximizes the value you can obtain from the car when it comes time to sell it. As a depreciating asset, it is difficult to do this. Having an accident can significantly impair the value of a car if the repair is conducted improperly, maintaining a service record with the car’s dealership and having any vehicle repair performed there will help to mitigate this depreciation as much as possible.
Conducting your car’s repairs at the agency means your vehicle’s unique Vehicle Identification Number (VIN) is logged with every fix. This means that vital statistics about your car, such as mileage and repairs and service history, are logged and kept on file on the dealership’s network. Some automobile brands maintain a global database allowing potential buyers an avenue to verify the car’s age and condition, creating important reassurance in the buying process which is particularly valuable with high-value or luxury vehicles.
Cost and Car Insurance Companies’ Conditions
Generally, agency repair often inflates the cost of car insurance policies, and this additional cost has to be considered by the policyholder. In addition to this, insurance companies have their conditions for the vehicles they will accept to cover with agency repair. This is often based on the age of the vehicle, and in most cases, 3 to 5 years will be the limit of the age of a car.
What is non-agency repair?
Non-agency repair denotes that in the event your vehicle is involved in an accident, any and all repairs will be conducted at a non-agency workshop. Non-agency can be interpreted to mean ‘independent,’ however, these workshops will usually be vetted and have to meet certifiable standards including quality certification.
Insurance companies, in the UAE as everywhere else in the world, have a duty to their shareholders to reduce their costs as far as possible. They implement a cost/benefit analysis when creating policies that outline the factors that either qualify or disqualify a vehicle from agency repair and non-agency repair. Switching to non-agency repair allows the insurance company to choose from a wider pool of workshops, all of whom compete to offer the insurance companies more competitive pricing and services.
The decision making on whether non-agency repair is mandatory on vehicles by car insurance companies in the UAE incorporates a variety of factors, including:
Import or UAE Spec
Whether your car is imported from abroad or purchased from a domestic agency can influence the decision making. An increasing number of vehicles are being imported into the UAE’s second-hand car market, most often from Japan or the USA.
3 to 5 years seems to be the limit for most car insurance companies in the UAE for agency repair, after this many only offer non-agency repair. This is most probably due to changes in the cost of parts and servicing once a vehicle reaches this age, as well as the depreciating value of the car.
Some insurance companies in the UAE have invested significant resources in building a network of highly reputable workshops that are capable of repairing a wide range of vehicles. Having a stronger network of partners they can rely on to conduct even the most technically comprehensive repairs gives them the confidence to be able to make non-agency repairs a more appealing option for a greater spectrum of their policyholders.
5 points on non-agency & agency repair
- Check your vehicle’s warranty, what terms and conditions are there and under what circumstances will the warranty be voided.
- Use a reputable insurance comparison service in the UAE such as aqeed.com to find policies with options and prices that suit your budget best
- Always read the wording of your policy document to understand what is and isn’t covered, especially when it comes to agency vs. non-agency repair.
- Clarify and understand hard or technical terminologies by speaking to insurance experts or reading FAQ’s.
- If your car insurance company insists on non-agency repair, ask for details of the workshops in their network and do your own research online on their service quality.
- Research the residual value of your vehicle’s make and model, use a website such as dubizzle.com to determine the approximate depreciation you can expect and make sure you bear this in mind when deciding on whether an agency or non-agency repair will be an issue for you.