Top 10 cars in Dubai: How insured are they?

Although car insurance is mandatory in Dubai and across the United Arab Emirates, drivers must be aware of differences in coverage, a new report has cautioned.

A recent survey of 45,000 cars in the emirate by QIC Insured – part of Qatar Insurance Company – and home services website MoveSouq.com found that roughly 20 per cent are under-insured.

Under-insured cars are those that are covered only by a third party liability policy, despite being eligible for comprehensive insurance.

There are currently two different types of insurance in the market, said executive vice president of MENA Retail at QIC Insured Frederik Bisbjerg.

Comprehensive insurance provides coverage for damages to the driver, passengers and the vehicle resulting from collisions and other causes such as fire and vandalism, regardless of who is at fault.

Whereas third party liability insurance provides only the minimum coverage allowed by law. For instance, if you are at fault, it will just pay to repair the other person’s car and/or cover his or her medical bills.

“Drivers who own larger, high-end cars tend to make riskier insurance choices. They often think, ‘I won’t cause an accident…I’d rather save on the insurance and just get third-party coverage,” said Bisbjerg.

“This line of thinking puts the vehicle owner at risk, since they will be on the hook for fixing (or replacing) their own car or paying for any outstanding car loans if they cause an accident.”

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MoveSouq.com chief executive Bana Shomali suggested two tips for those shopping for car insurance.

“First, if you have a car loan, you should check with your lender (bank, dealership, etc.) because your financing conditions will most likely require you to have comprehensive coverage.

“Second, find out what your car is really worth. This will give you an idea what it will cost to fix it if something happens. If your car is a recent model, buying comprehensive insurance might be a smart investment. However, with older cars, you may be confident that you could afford to pay to repair or replace it,” she added.

Currently, the UAE market typically offers comprehensive insurance on car models from 2009 and later.

“If your car model year is 2008 or earlier, you may face difficulties getting a comprehensive policy – given that it is considered an older car,” added Bisbjerg.