Not all car insurance plans are created equal
Posted on January 31, 2022
You are out shopping for shoes and while you have the money to buy a decent, branded pair of runners, you decide to settle on a cheap knock-off. You’re probably thinking, it’s not that bad right? Wrong. Saving a few dirhams can soon turn into mayhem when the shoes begin hurting and then falling apart. This penny-wise pound-foolish lesson can apply to almost any aspect of your life but as insurance nerds, we’d like to shed light on the importance of selecting the right car insurance plan in the UAE and not the cheapest.
Most insurance comparison websites will have you believe that your top concern when selecting a car insurance plan should be its cost. It is one of the criteria, but car insurance is one area where frugality may potentially backfire. It's critical to select the right level of protection and service at the best value. At the end of the day, you get what you pay for.
So, here are a few key things to consider when selecting your car insurance plan.
Choose the right coverage
The first step is to identify the type of coverage you require between Third-Party Liability (TPL) and Comprehensive insurance. You might be tempted to simply get a Third-Party Liability plan that covers the cost of any liability you owe to the other party involved in a collision when you are at fault but in this case, your vehicle is not covered.
Comprehensive, as the name suggests is an all-inclusive plan that protects your vehicle in addition to the third party involved in an accident and is the recommended way to go. In both cases, make sure you choose an insurer that gives you the highest limit, as all covers are not equal. For example, insurance companies can just set this limit at the minimum legal requirement of AED 500,000 but if you were to hit one of the many Bentleys or Ferraris driving around in the UAE, the accident would cost you the difference between the price of the car and the limit. Hence, you should consider choosing an insurer that provides a limit above AED 3,000,000 for total peace of mind.
Grab those freebies
Once you’ve decided the type of coverage, dig deeper. The devil is in the details. Starting with the limit of your policy, look for value-added features in a comprehensive plan such as the option to have agency repairs, desert driving for 4x4, a good roadside assistance programme and ‘natural perils’ protection in case of rain and flood. When a ‘too good to be true’ price is offered, that is exactly what it is, and you won’t be protected.
Adventure-proof your insurance
When in the UAE, one cannot shake off the urge to dune-bash with a 4x4 a few times in a year. Most insurers don’t cover you for this! But a limited number do. Hence if spending more time outdoors in the desert is your thing, choose wisely. Moreover, if you want to discover the beautiful next-door Sultanate of Oman, some insurers cover you when crossing the border and can provide you with the ‘orange card’ free of charge.
Choose a strong claim payer
The main purpose of buying insurance is to protect your car against an accident. If an insurance company makes tall promises but fails to pay your claim, the insurance is worth nothing. Make sure you buy from insurers that are financially strong and stable. Find out how easy it is to file a claim, or if they take ownership of the claim process. Only a handful of insurers have a fully automated process that always keeps you informed and is set up to put you back on the road as fast as possible.
Julien Audrerie, Head of Consumer Lines and Marketing at Oman Insurance shared his thoughts on the importance of choosing the right insurer, “Following the UAE market closely, it is evident that most insurers are now talking about low prices and discounts to attract clients. But with the accident frequency coming back to the pre-Covid level, some of them are facing financial losses and are therefore delaying claim payments. We advise our customers to select a financially strong insurer, a comprehensive product and an easy claim process. Choose overall value over cheap premium. And quite often, the price gap between both is only around AED 200.”
Choose convenience over price
Saving an additional 200 Dirhams over a year’s insurance may seem ideal in the short run, but it may almost always be a bad idea. Good insurance companies will invest in technology and innovation that will support you from buying your insurance plan, all the way to claim management. It is worth paying a bit more to experience great service. Peace of mind is priceless.
“We have witnessed an exponential increase in the number of comparison websites offering everything from shopping vouchers to airline tickets along with the cheapest possible insurance coverage. In all this noise, it is not surprising to witness a surge in overall dissatisfaction of customers when their claims are rejected or when they are subjected to hidden conditions at the time of an accident. Be wise about your car insurance and emphasize more on product features, value-added covers and the financial stability of your insurer.”, concluded Julien Audrerie.
Being an essential protection shield each time you take to the road, always select your insurer sensibly, ask plenty of questions and make sure not to be deceived by low prices and massive publicity drives. We wish you a safe driving and hope this guide will help you choose a better car insurance plan in the future.