As of January 1st, the new motor insurance rules and regulations policies are in effect. This unified regulation, approved and set in motion this past September, is applied on all active insurance policies starting 2017.
It’s a long and lengthy policy to digest so we’ve done the heavy lifting for you and distilled down the key takeaways. So what does this new policy mean for you?
(Image Credit: www.ia.gov.ae)
The 2-in-1 Insurance policy is long gone
Instead of comprehensive insurance provided by a single policy covering both personal and third-party damages, the new regulations dictate that vehicle insurance is now separated through two independent insurance policies:
- Civil Liability policy (Obligatory): Protects 3rd party entities in the event of an accident
- Damages, Loss, & Civil Liability Policy (Optional): Insures own vehicle & self in the event of an accident
What does this mean for my wallet?
Here’s an example: Insuring a 6 Cylinder 4×4 for 3rd party damages will cost you between 1,050 AED to 1,900 AED.
IA (The Insurance Authority) has set a bracket for the minimum/maximum rates that vary according to the specs of the vehicle. This allows insurance companies to play around within the given bracket according to the driver’s history.
Find out under which bracket your vehicle would fall under here.
What about insuring my own car?
Following the same 4×4 example, an additional policy covering damages & losses would cost a minimum of 2,000 A.E.D.
Easily above the 3,000 margin with premiums up to a maximum of 7% depending on the driver’s age, history,car make, & model.
Is there a bright side?
Despite being costly, the new system has its benefits. IA’s minimum/maximum bracket prohibits insurance companies from setting prices below the needed cost price, no longer compromising the policyholders benefits. Furthermore, the maximum bracket rate in turn protects policyholders from exaggerated prices set by insurance companies.
The unified regulation also provides larger coverage to policyholders. Here are some examples of the new amendments:
- An increased coverage claim of 2 million AED (previously 250,000) against property damage arising from an accident.
- No Car? No Problem! Motorists affected by an accident are now entitled to be compensated for a rental car for a maximum period of 10 days, with a value up to 300 AED per day.
- The insurance company is now liable to pay 200,000 AED in case of the death of a member of the insured family in the event of an accident.
- The insurance company is accountable for repairing any damage to the affected vehicle. In the event of repair costs exceeding 50% of the vehicle’s market value, full market value must be paid to the policyholder provided the amount does not exceed 2 million AED.
As for the Vehicles Loss and Damage policy, it includes several new benefits with the most outstanding being that insurers & their customers will now be able to resort to experts in attempts to resolve a dispute.
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