Car accidents are completely unpredictable. No data model or analysis can predetermine an accident, and you never know when you might get into one. It can be as minor as getting small scratches on your car’s body to something as large as death or bodily injury. All these outcomes, whether it’s damaging the car’s or a person’s body, can get heavy on the pocket.

Enter, car insurance. If you’re a car owner, you are legally mandated to own car insurance under UAE’s motor laws. But, this should not be your only motivation behind buying a policy.

A car insurance policy will protect you financially against any losses or damages caused because of accidents and similar adversities. And, since you pay premiums for the same, you should make sure the policy is worth it and fits your needs. Insurance is, after all, a personal purchase.

In this article, we will discuss some factors that you need to consider before purchasing a car insurance policy.

Things To Note Before Purchasing A Car Insurance Policy

Here are a few important factors you should keep in mind before buying car insurance -

1️⃣Check policy details and plan type

Before purchasing a car insurance policy, it is essential to check the scope of coverage offered and see whether it suits your requirements.

👉If you want complete protection for your car, buying a comprehensive policy will be helpful as it provides coverage for losses and damage incurred by you and the third party in an accident.

👉If you don’t want extensive coverage, you can buy third-party liability insurance. This plan protects you against legal repercussions while financially shielding you against any damage caused by you to a third party or their property during an accident.

2️⃣Understand the excess

An excess, also known as a deductible, comes into play when you file a claim. The approved claim amount is divided into 2 parts - the excess/deductible is the part that you have to pay and the remaining is paid by the insurer.

Deductibles reduce the premium of your car insurance. The higher the deductible, the lower the premium that you pay for your car insurance because you agree to participate in the risk coverage. However, keep in mind that you will need to pay a larger portion of the claim. Be very sure that you won't file any claims in the future if you decide to opt for a deductible to lower your premiums.

For instance, you buy a comprehensive car insurance plan and opt for a deductible of AED 500. In a few weeks, you meet with an accident and the repair costs come to around AED 2500. So, when you file a claim, you will need to pay AED 500 out of your pocket, before the insurer pays the rest.

3️⃣Compare quotes from different insurers

Car insurance is sold by various insurance companies at different prices. So, before you purchase a policy, compare the quotes across different insurers so you get a policy that's affordable. Next, compare the coverage, benefits, features, and exclusions under the different policies offered. Make sure they align with your needs and requirements.

4️⃣Carefully go through the fine print of the policy

While buying a car insurance policy, always go through the fine print. You can look at things like the claim settlement process, add-ons available with the policy, geographical exclusions, etc. This will help you understand the inclusions and exclusions of the policy and avoid any shocks when you make a claim.

For instance, any accident or car damage outside the geographical location, any indirect loss that may happen to the car, or any devaluation of the car due to its use, breakdown, defect, or breakage of the mechanical or electrical devices, etc. may not be covered by the insurance company.

5️⃣Be aware of additional deductibles

When you make a claim under your car insurance policy, the insurer may impose extra deductibles. You should be aware of the same. Always read the policy wording thoroughly to know the complete list of deductibles that an insurance company may apply.

For example,

● If a person meets with a car accident and is below 25 years, then 10% of the amount of compensation will be the additional deductible charge.

● If the car for which the claim is raised is a sports car or a modified car, the additional deductible charge will be 15% of the amount of compensation.

● If the claim raised is for rental cars, 20% of the amount of compensation will be the extra deductible charge.

Keep in mind: These are a few examples of additional deductibles. There can be more deductibles imposed by the insurer and you will have to go through their policy wording - as they may differ for different insurers.

Wrapping Up !

We have reached the end! Keep the aforementioned points in mind before purchasing a car insurance policy. Evaluate your needs and choose a plan that suits you the best. Keep an eye on different insurance companies and the policies they offer to make a well-informed decision.