Types of Car Insurance Coverage
March 21, 2023
● Car insurance is a vital aspect of vehicle ownership in the United Arab Emirates. With the fast-paced and ever-evolving nature of the UAE's transportation landscape, it's important to understand the different types of car insurance options available to ensure that you and the other party, if any, are protected in the event of an accident or other unforeseen circumstances.
● When you set out to buy car insurance for your vehicle, you’ll see that there are two major types - comprehensive car insurance and third-party liability insurance - each with its own set of benefits and limitations.
● In this article, we will explore these different types of car insurance available in the UAE, so that you can pick the right policy for yourself. Whether you're a first-time car owner or a seasoned veteran, this article will provide you with all that you need to know about your car insurance in the UAE.
Types of Car Insurance In UAE
The two types of car insurance that you can choose from in UAE are –
☝️ Comprehensive Car Insurance
✌️ Third-Party Liability Insurance (TPL)
Let us now understand each type in detail.
Comprehensive Car Insurance
Comprehensive car insurance is the most extensive type of car insurance available. It not only covers damages to your own vehicle but also provides liability coverage for any damages or injuries you may cause to other parties involved in an accident caused by your vehicle. It's a good option for those who want the best protection for themselves and their vehicle while driving in the UAE.
What does Comprehensive Car Insurance cover?
1️⃣Comprehensive car insurance will cover the loss or damages to your car and the accessories in it. This includes the damaged and spare parts as such -
👉 If the damages caused are due to an accidental run-over, turnover, collision, or incident.
👉 If the damage is caused by an external fire, explosion, lightning, or spontaneous combustion.
👉 If a loss is caused due to robbery or theft.
👉 If the damages are a result of a third party’s willful act.
👉 If the damage occurs during loading and unloading procedures and general operations associated with the land and inland water transport processes, elevators, and lifting machines.
2️⃣If an accident happens, here’s what the insurance company will cover –
👉The cost of repairing or replacing your car or any of its parts, accessories, and spare parts. In short, it will cover the costs of restoring the vehicle to its condition before the accident.
👉It will pay the amount of loss or damage in cash if both parties agree it.
👉In case of a total loss, the insurer will replace the damaged vehicle unless you raise a request to the insurer to pay you the amount in cash.
👉It also covers all the costs for safeguarding and transporting your car to the nearest repair shop in case your car is immovable due to an accident.
👉It includes coverage for death or injuries caused to any third party or damages caused to their properties.
Add-ons available with Comprehensive Car Insurance
Here are a few add-ons that you can add to your comprehensive car insurance policy to enhance its coverage, by paying an extra premium -
1️⃣Personal Accident Cover
A Personal Accident Cover protects you against any expenses incurred due to bodily injuries sustained in an accident. It is recommended that you add this add-on to your policy to ensure that you have adequate protection in case of an accident.
2️⃣Agency Repairs Add-On
With this add-on, your car will be repaired at the original manufacturer's workshop. This ensures that only genuine spare parts are used and the repair is done to the manufacturer's standards.
● The add-on is generally provided for 2 years and can be increased to 5 years by certain insurance companies in exceptional cases.
● Choosing this add-on can provide peace of mind as it makes sure that the repairs are done to the highest quality and can help to maintain the value of the car.
3️⃣Roadside Assistance Add-On
● The Roadside Assistance Add-On provides coverage for a variety of services such as mechanical repairs, towing, flat tyres, battery boost, etc., that can help you in case of emergency breakdowns or minor accidents.
● This add-on is a good option for those who are frequently on the road and want to ensure that they have access to help in case of an emergency.
4️⃣GCC Coverage Add-On
Having a GCC (Gulf Cooperation Council) Add-on with your car insurance policy can be particularly useful if you frequently travel to other GCC countries like Bahrain, Kuwait, Oman, Qatar, etc. Some GCC countries may require you to have this extension in order to be able to enter the country with your vehicle.
5️⃣Car Rental Add-On
Some insurance providers offer a rent-a-car facility if your own car is damaged and is being repaired. It is a valuable option for those who rely on their car for transportation and need a replacement vehicle.
Off-road adventures are extremely popular in the UAE, and if you're someone who enjoys activities such as desert rallies or dune bashing, an Off-Road Coverage Add-On can be a good option for you. It provides protection for your vehicle when used for off-roading and can cover damages that may occur as a result of such activities.
7️⃣Oman Extension Cover
● If you are a frequent traveller to Oman, having an Oman extension cover add-on on your car insurance policy is mandatory. This is because without such cover you will not be able to enter the country of Oman.
● However, this extension will only cover damages caused to you and your car and not any third party. To cover any damages caused to the third party, you will have to purchase a third-party cover online or at the border. It's important to check with your insurance provider to see if you have an updated insurance policy when travelling to Oman.
Note: The list of add-ons provided will differ from insurer to insurer. While some insurers may provide you with a few add-ons as inbuilt features, others may charge you for the same.
What doesn’t Comprehensive Car Insurance cover?
Any indirect losses that could happen to you or the depreciation of the vehicle as a result of usage, mechanical or electrical device failure or defects.
1. Any damages brought on by an overloaded vehicle, i.e., a vehicle that -
➔ Is one that is wider, longer, or taller than permitted.
➔ Has more passengers on board than permitted.
Comprehensive car insurance does not cover such costs if such overloading is identified as the proximate cause of damage.
2. Any tyre damage that has not been caused during the said accident.
3. If the car is being used for any purpose other than the one mentioned in the insurance application.
4. If the proximate cause of the accident was because of a speed race or test.
5. If the driver of the vehicle has a suspended or revoked licence, one that does not comply with traffic legislation, or that has expired but has not been renewed within 30 days of the accident.
6. If the driver's licence of the person driving the car has been suspended by the court, competent authority, or according to traffic regulations.
7. If the car was driven under the influence of alcohol or drugs.
8. Unless an extension is taken in the policy, any damages to the vehicle that are incurred outside of the defined geographic area are not covered.
9. Unless you have purchased an Off-Road Add-on, any damages caused to the car while off-roading are not covered.
10. Any damages caused due to war.
11. Accidents that have happened as a result of, either directly or indirectly, natural catastrophes including earthquakes, volcanoes, floods, etc.
What is Third-Party Liability Insurance?
● Third-party liability insurance covers deaths or injuries caused to third parties involved in an accident. It also covers damages to their property caused by the insured vehicle. This type of insurance is mandatory under UAE motor laws and must be renewed annually.
● It does not cover damages to the insured vehicle or any injuries to the driver or passengers of the insured vehicle.
What does Third-Party Liability Insurance cover?
The following situations are covered by Third-Party Liability Insurance -
1. Death or bodily injuries caused to any third party, including motor vehicle passengers.
2. Damages caused to any third-party property.
3. The party found to be at fault for the accident, based on the police's investigation, is financially responsible for paying for these damages and injuries. Here the term Third Party Property Damage (TPPD) also includes “other vehicles” which have suffered damages due to the accident caused by the person at fault.
What doesn’t Third-Party Liability Insurance cover?
Third-party Liability Insurance will not cover the following in case of an accident -
1. The damages caused to your own car.
2. Theft or total loss of your car.
3. Accidents outside the specified geographical area.
4. Neither passengers nor paid drivers for your vehicle are covered. However, an extension for the same is available under which both passenger and driver will be covered.
Comprehensive Car Insurance Vs Third-Party Liability Insurance
Let us now compare the key parameters of both types of insurance so you can make the right choice -
|Parameters||Comprehensive Car Insurance||Third-party Liability Insurance|
|Scope of Coverage||It provides financial protection to you, your car, and any involved third parties.||It covers only third-party losses or damages.|
|Customization||You can customise the policy based on your requirements and budget. For instance, you can pick add-ons to enhance the coverage of your insurance policy.||There is no option to customise the policy.|
|Cost||When compared to third-party liability insurance, it is relatively expensive.||The premium is comparatively lower as it only provides limited coverage.|
|Theft Coverage||It will provide coverage in case your vehicle is stolen.||It will not provide any coverage in case your vehicle is stolen.|
We have now come to the end of this article. Car insurance protects owners and drivers from financial losses resulting from accidents or other incidents. We recommend that you clearly assess the two types of car insurance policies available and choose the best one that fits your needs.