Does Higher Auto Insurance Premium Also Mean Better Value for Money?
Since 1st January 2017, auto insurance premium increased throughout UAE including Dubai. According to the automotive industry reports, almost 35% of the car owners in Dubai will be affected by this increase. With minimum premium fees increased, it is said that mostly low-cost car owners will be most affected.
But the real question is, what is there for car insurance? Is there any better value with the higher prices? Is there any added advantage that comes with higher premium costs? The answer is “Yes”.
What Are the Added Advantages for Increased Premium Costs?
Even though when many car owners especially those who choose the insurance services with minimum premium costs are not happy with the increased costs, everything is not as bad as it sounds. It is because with the higher price also comes better value. So with the increase in the cost, the overall quality of car insurance also gets better for UAE residents.
So what are the added advantages?
First, with higher prices comes higher damage protection which is great news for car owners.
Second, replacement car is mandatory for insurance providers during the period of car repair which was previously only an option for insurers. But from 1st January 2017, no matter which insurance policy do you have and how much you are paying as premium cost, you will get a replacement car.
Not only a replacement car but the car owner can also choose between a replacement car or Dh300 a day for the maximum of 10 days in compensation.
In addition to that, the insurance services will also include free of charge ambulance and medical evacuation. In fact, it is the cost of the ambulance and medical evacuation that is added to insurance fees and resulted in the increase of premium costs.
Some other added benefits include:
- The amount of compensation for material damage is increased for each accident from Dh 250,000 to Dh 2 million.
- For cars less than a year old, the insurer is obliged to get repairs from the workshops of authorized dealers.
According to the market experts, the new changes are a good sign for the industry. For most of the top experts working in the insurance sector for years, the growing competition and race to get the largest share of the consumers dropped the insurance premiums to lowest levels along with the quality of insurance.
But not anymore, with the minimum allowed premium cost, comes better value for your money. More benefits against your insurance policy and better coverage. So overall, the higher premium cost is rated as a good thing for UAE car insurance industry.