New Regulation on Vehicle Insurance Policy in UAE
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Minimum and Maximum limit for rates to protect the rights of policyholders and companies’ interests.
Insurance company, agent or broker shall not impose or collect any additional amount unless same is decided by Insurance Authority.
Insurance companies applied the revised rates to all the vehicle insurance policies issued from 1st January, 2017. Now the Rates set represent the minimum and maximum limits to be considered. Insurance companies may discretionally compete by submitting rates according to the company’s experience with the customer and insured’s rights shall not be prejudiced.
The Regulation stipulates that the insurance period shall be 13 months, and the premium shall be collected for the fractions of insurance period on pro rata basis.
The Regulation obliges the insurance company to accurately and obviously insert the value of premium or the subscription, to be collected from the insured, in the relevant insurance policy and vehicle insurance certificate.
New Vehicles Insurance Policy also includes the increase of the amount of compensation per accident for material damage from AED 250,000 to AED 2 million and reparation of the damaged vehicle in the agency’s workshops, if the accident occurs during the first year of its driving.
The affected person, i.e. owner of the private vehicle, shall obtain a replacement vehicle during the reparation for ten days or pay a daily rent value amounting to AED 300 maximum, while the owners of commercial are not covered with insurance due to the high cost of insurance. All these additional benefits will also mean higher premiums.
With the new rules, base insurance coverage will increase like a replacement car, increase in compensation per accident, etc. But, most importantly there will be more transparency.