UAE car owners will be paying a lot more on motor insurance for first time in three years – Gulf News

After 3 years, UAE insurers will be forced to jack up premiums after claims pile up
Dubai: Is the ‘free’ ride over for UAE car owners on their motor insurance?
After nearly three years of declines or remains stable, motor premiums are heading for increases in 2023, cutting across vehicle categories. Insurance companies, sources say, have no further room to cut corners on their motor portfolio.
“Rising repair costs and increased frequency of accident/damage claims compared to the Covid years of 2020-21 will force rate increases,” said Avinash Babur, CEO of “The days of motor premiums being considerably discounted due to fewer cars on the road leading to lower claims are over.
In the first six months, UAE insurers has solid – rather than spectacular – numbers to show for their efforts. Based on market feedback, motor-related portfolios for most of the big players recorded steep declines because of claims.
According to Babur, higher premiums will most likely be felt on entry-to-mid priced vehicles, because this is where the biggest discounts had been offered in 2020-21 as insurers focussed on getting vehicle owners to renew their policies. (With work-from-home being the norm, vehicle usage became minimal during the better part of 2020, and some of that was reflected through 2021 too.) Premium on a Toyota Corolla is around the Dh830 mark, while a Honda Accord is seen as inching close to Dh1,000. When it comes to SUVs, it’s Dh1,956 for a Nissan Patrol and Dh1,711 for a Toyota Land Cruiser on average.
Babur reckons that some increases will even be felt with immediate effect – vehicle owners will need to blame inflationary cost pressures for that.
“It’s more likely that inflationary pressures from global supply shortages of vehicle parts needed to repair insured vehicles are going to be passed on to consumers in the months to come,” he added. “For now, this inflation-linked cost on motor insurance premiums is yet to be seen.”
“Insurers are now assessing the impact of inflationary pressures on their portfolios as well as preparing for higher standards of financial reporting under IFRS 17 and greater enforcement of local solvency regulations.”
Is there any way UAE vehicle owners can avoid a looming hike to their premium payouts? Toshita Chauhan, Head of Business – General Insurance at, reckons the best way to do so would be to have a ‘no-claims’ record. Because that’s the best way under current market circumstances to snag a discount, and fairly sizeable ones too.
“If you have been a driver who has not claimed on their motor insurance policy for certain numbers, you can avail the no claim discount benefit offered by insurance companies,” said Toshita.
Insurers currently offer no-claim discounts of up to 30 per cent on the current base premiums.
Another way would be on the car value. “While it’s important to ensure that your car is appropriately valued in your policy, it is worth noting that since your premium is a percentage of the sum insured (i.e., the car value) you can save some money if you value your car a little lower,” said Toshita.
“However, the valuation should be accepted by your insurance company and they do have a right not to accept. Car insurance policies in the UAE are ‘agreed value policies’, which means that the policyholder and the insurance company both have to agree on a valuation for the vehicle at the time of policy issuance.”
And then there’s outside-of-agency repairs. “Agency repair cover can really cost a lot more and in the end, it may not even be something that you really need,” said Toshita.
In order to remain relevant in the future, we must embrace digitalization to deliver a culture of customer excellence, because they buy experiences and emotions rather than just objects or services. After speaking to many of them we realized buying third-party insurance in the UAE market was not easy. Kamal Insurance will change this.
– Hanaa Al Hinai, Deputy CEO of RSA UAE and Bahrain

Get Breaking News Alerts From Gulf News
We’ll send you latest news updates through the day. You can manage them any time by clicking on the notification icon.
Dear Reader,
This section is about Living in UAE and essential information you cannot live without.
Register to read and get full access to
By clicking below to sign up, you’re agreeing to our Terms of Use and Privacy Policy
Forgot password


Leave a Comment