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The most common question that clients have is, "Why has my car insurance in the UAE premium increased in 2024?" The shocking news is that your car insurance UAE premium is greater than it was the year before. And perhaps more than in the year prior. This applies to all vehicles as well as all insurance providers. There has to be a mistake.
How can the premium of insurance for your vehicle increase when its value is lower and you have never been in a collision? In actuality, there are three factors contributing to the UAE's rising car insurance premium.
Covid cut your premium in half
Following the COVID-19 pandemic in 2020, some individuals crashed, stopped commuting, and worked from home. This meant that we could lower most premiums by up to 50%. It shows that since 2022, you have received a large discount.
In 2023, premiums have returned to normal along with traffic levels. The good news is that, despite the rise, your rates are still roughly 25% less than they were before COVID-19. The unfavorable report? Expect them to rise even further the following year.
As your car becomes older, repair expenses don't go down
Your premium will be decided by the cost of repairs rather than the replacement of your vehicle. Additionally, as your car ages, repairs get more costly. Why? Because as demand declines, the cost of outdated spare parts rises. Inflation-driven increases in agency charges haven't helped either.
New cars are just more expensive in the UAE
The new car market has also been impacted by inflation, tight inventory, and strong demand. Therefore, insurance for a luxury SUV from 2025 will cost up to 10% more than insurance for the same model bought the previous year.
How can I reduce my premiums?
The good news is that comprehensive or third party car insurance in UAE is extremely affordable. In fact, premiums can be three to five times higher than in New York or London. Because of this, it makes more sense to choose your insurer for car insurance Dubai and the UAE based on benefits and service quality rather than price.
Well-known insurance providers in the UAE use a variety of variables to ensure that good drivers get the lowest premiums. The UAE Regulator's implementation of a centralized database to validate drivers' prior claims histories across all emirates would, however, have the greatest influence on premium reductions by allowing insurers to give the greatest drivers the best rates.
In conclusion, a few key factors, such as the recovery from COVID-19 reductions, the rising cost of maintenance for older cars, and inflation in the new car market, will result in an increase in car insurance Dubai and the UAE rates in 2024. These factors may seem bothersome, but it's crucial to remember that car insurance UAE is still affordable in comparison to other global markets.
By focusing on reputable insurance companies with comprehensive and third party car insurance in UAE that offer value-added services and using any available discounts, drivers can still discover affordable solutions that provide complete coverage and peace of mind.
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