Car insurance in the UAE: what each level costs

Insurance is the first bill that arrives after you buy a car, and it is the one most buyers price last. The gap between the cheapest and the dearest cover on the same car can be four thousand dirhams a year, so it is worth understanding what the money buys.

There are three levels sold in the UAE, and they are not variations on a theme. They are different products.

Third-party liability

The legal minimum. It pays for damage you cause to other people and their property, and nothing at all for your own car.

Typical cost runs from around AED 450 to AED 1,800 a year depending on the car and the driver.

If your car is worth AED 15,000, this is often the rational choice: a year of comprehensive cover could be a fifth of what the car is worth, and the most you can lose is the car.

Comprehensive

Covers your own car as well: accident damage, fire, theft, and usually a courtesy car and roadside assistance.

Typical cost runs from about AED 1,200 to AED 5,000 a year. On a car worth AED 60,000 or more this is the level most owners settle on, because a single at-fault accident can cost more than several years of premiums.

Read the excess before you sign. A low premium with a AED 2,000 excess is not cheaper than a higher premium with AED 500 once you actually claim.

Agency repair

An add-on to comprehensive, not a level of its own. It means the car is repaired at the manufacturer's dealer with genuine parts rather than at a workshop the insurer chooses.

It usually adds ten to fifteen per cent to the premium, and policies including it commonly land between AED 3,000 and AED 6,500.

Two things decide whether it is worth it. If the car is still under manufacturer warranty, non-agency repairs can affect that warranty, which makes agency cover close to mandatory. And once a car passes about three years old, insurers typically apply a surcharge for agency repair — often around half again — which is the point at which many owners drop it.

What the regulator caps

Premiums are not unlimited. For comprehensive cover with agency repair, the published maximum is five per cent of the vehicle's value for a saloon and seven per cent for a four-wheel drive, with minimum premiums of AED 1,300 and AED 2,000.

If a quote sits above those percentages, it is worth asking why.

Before you buy the car

Get a quote before you pay, not after. Insurers price on the car as much as the driver, and two cars at the same price can be two thousand dirhams apart to insure. A sports model, a large four-wheel drive or an imported specification can all move the number.

Every figure here is a market range, not a promise. Your own quote depends on the car, your age, your licence history and your claims record.