Car insurance is mandatory for all vehicles in the UAE. Therefore, all vehicle owners must get their car insured to avoid hefty fines and penalties. They can choose from the two main types of auto insurance available in the UAE: comprehensive insurance and third party insurance. In this guide, we will discuss the differences that can help you to choose between comprehensive or third party car insurance as per your need.
Factors that Influence Car Insurance Cost in the UAE
Comprehensive car insurance is relatively expensive than third-party auto insurance it offers a broader coverage including both the insured vehicle and third-party vehicles.
The yearly car insurance in costs between 1.25% to 3% of the value of your car. However, the driver’s age, the age of driving license and the number of previous car insurance claims also influence the premium of the insurance policy. For this, you must know how to file a car insurance claim in the UAE.
Comprehensive Insurance vs Third-Party Insurance
Now that you have a general idea of how these two types of insurance differ, let’s take a detailed look into the kind of coverage each offers.
Comprehensive Car Insurance
A comprehensive car insurance Dubai policy offers more coverage than third-party car insurance. One of the major differences between third-party insurance and comprehensive car insurance policy is that the latter provides coverage to both the claimant and the insured party. This also includes accidents that happen due to the driver’s negligence such as hitting the pole while taking a turn. A comprehensive car insurance policy gives you peace of mind as your hospital expenses are also covered.
However, comprehensive car insurance policies may also vary according to the price. Different insurance providers can have different policies with different regulations and guidelines. These car insurance policies also come with some limitations and restrictions.
What it Covers
Generally, a comprehensive auto insurance policy in Dubai covers the following:
- The policy covers the damages caused to the insured vehicle due to accidents, collisions and natural disasters.
- Any damage caused due to the fire breakout, explosion or self-ignition.
- Damage of car windshield or other glass damage.
- Car theft or any loss caused due to theft.
- Any car damage that is caused by a bird or a falling object.
- Any damage that is deliberately caused by the third party.
- You can also opt for add-ons such as breakdown assistance, engine and gearbox protection amongst others.
For a higher price, there are some additional options you can select when choosing comprehensive car insurance. These include, but are not limited to the following:
- Getting another car while your own has gone for maintenance
- Offering coverage when you are going outside the UAE
- Roadside assistance 24/7
- Engine Cover
What it doesn’t cover
- Your policy may not cover any of the above expenses in case of accidents under the influence of alcohol or drugs.
- Mechanical or electrical breakdowns.
- Any damage that is caused due to the age of a vehicle.
- It also does not cover damages to parts made of fibre or rubber.
- Also, your claims won’t be covered if you were found without a driving license at the time of incident.
Third-Party Insurance
Third-party insurance offers the minimum coverage required by the law. One of the benefits of third party insurance is that it fulfils the basic legal requirement within a small budget. In case of any accident, the insurance company only provides coverage to the third party.
For cars older than 7 years, you can only opt for third-party car insurance in Dubai.
What it Covers
- Theft and Fire (if only you opt for it).
- Property damage to the third party’s property.
- Medical expenses of third parties and penalty in case of their death.
- Any damage that is caused due to a natural disaster will be covered in the third party insurance policy.
- In case of an accident, the company will replace the damaged parts of the vehicle or provide the replacement cost.
What it Doesn’t Cover
- Medical expenses or damage caused to the insured vehicle.
- Replacement of the car and few other services are not covered.
However, always check and read the policy to make sure what exactly is covered and not covered
Which Is Better: Comprehensive or Third Party Insurance
Now you have a better idea about the difference between comprehensive insurance vs third party insurance. Comprehensive car insurance offers extensive coverage, whereas third party car insurance only covers the damages that your car can cause to another vehicle.
Since a comprehensive car insurance policy provides complete coverage, its premium is higher than the third party car insurance. However, if it is still difficult to choose one, do a side-by-side comparison of different policies before you finally select one.
You can select a car insurance company from across the UAE but it can get a little bit confusing to understand those technical clauses. Therefore, always read the contract and terms and conditions of the insurance policy before signing it.
This concludes our guide about the difference between third party insurance and comprehensive insurance. It is suggested that you go for a car insurance policy that is affordable, convenient and covers major damages as per your needs. Therefore, before you buy any insurance policy – comprehensive or third party car insurance – make sure you analyse your needs and evaluate the insurance coverage.
Car insurance in Dubai not only protects you from unforeseen expenses but also gives you peace of mind. Therefore, before you buy a used car in Dubai make sure you get your vehicle insured before taking it out on the roads.
Stay tuned to the UAE’s top car blog for more updates on car insurance, driving laws and all sorts of topics from the automotive industry.
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