By Ambareen Musa
Have you ever wondered why you're paying so much for your car insurance in the UAE?
Have you ever wondered why you’re paying so much for your car insurance? That’s a valid question to ask considering price is one of the biggest deciding factors among drivers looking to insure their cars.
A dodgy driving record marred with traffic violations, fines and black points may be one of the primary reasons your car insurance premium is too high.
A poor driving history is a red flag in the eyes of the insurer since it goes to show that you’re an unsafe driver and may be a liability to the insurance company. Overall, this puts your car at a higher risk of being damaged, making it more expensive to insure.
The Dubai and Abu Dhabi police keep running corrective training courses that allow motorists to have some or all of the black points removed from their traffic file. This may be worth pursuing if your driving history is forcing you to pay through the nose for your car insurance.
Do you have a higher statistical likelihood of getting involved in an accident? Insurance companies take into consideration historical statistics of accidents based on demographics and factor that into the insurance premium.
Certain demographics may inherently be more of a gamble to insure than others. Your age, gender and marital status, all affect your car insurance premium, but actuarial formulas vary from insurer to insurer.
For example, if you’re a young, single and newly-licensed driver, you may end up paying a higher car insurance premium than someone who’s in their forties, is married and has had a driving license for over a decade.
You may be paying too much for your car insurance if you don’t select your insurance plan carefully. Take your deductible for example – If your policy has zero deductible, you’re going to be charged a higher premium, while a policy with a 20 percent deductible will be offered at a lower premium.
Certain provisions of your car insurance policy may be redundant with coverage you already have elsewhere.
For example, you don’t need to opt for roadside assistance if you’re already covered by the car dealer’s roadside assistance plan, or you can skip personal accident coverage if you have a personal accident insurance policy already in place.
In other cases you may be paying for policy add-ons you’re never going to need. For instance, you can give add-on features like off-road cover and Oman extension a miss if you don’t plan to go on an off-road expedition or beyond UAE borders.
Certain car makes and models are more expensive to insure than others. If you drive a souped-up speedster versus a safe and no-frills vehicle, you’re definitely going to pay a higher-than-average premium on your car insurance.
Historical averages and crash studies put high-performance muscle cars at a higher risk of causing an accident.
You must also keep this in mind if you’re planning to modify your car or buy a modified car. While car insurance companies may be willing to cover the modifications made to your car, your insurance premium will spike because modifications may jeopardise car safety and modified parts also cost more to insure.
If you make small and frequent claims, not only will you lose your no-claims bonus, you will also be charged a higher premium upon renewal. Therefore, it makes sense to pay for small fixes and repairs from your own pocket to keep your next car insurance premium low. Treat your insurance policy as a hedge against big financial losses.
In many countries with a well-established credit reporting system, credit history has some bearing on one’s car insurance premium. With credit reporting still fairly nascent in the UAE, it is yet to be seen if insurers will take the driver’s credit report and credit score into consideration when providing a quote. Customers with poor credit scores will be hit the hardest – One more reason to work towards maintaining an unblemished credit report.
If you skip comparing your options before purchasing a car insurance policy, you’ll miss out on plans that are not only the most suitable for you but also offer the best value for your money. Settling on the first car insurance policy you come by also means you won’t be able to take advantage of deals and discounts available elsewhere.
Therefore, it’s best to generate multiple quotes and compare policy features across different insurance plans. You may also find that switching over to another insurer may let you save significantly more.