Car Insurance Cost for New Driver in UAE

Every driver has a different price than their car and its insurance. The car insurance underwriting process is ever-changing all the time and the prices are evolving over time. The cost of car insurance will depend on various factors and car model is one of the reasons. Here in this article, we discuss the car insurance cost. 

Car Insurance Cost

An estimate for car insurance costs can be made based on the value of the car. Suppose the car value is lesser than AED 100,000 then the initial rate will be 2.5%. For the cars which have their value higher than AED 100,000 and lesser than AED 300,000 then the initial rate will be 2.35%. If the car value is higher than AED 300,000 and the value is less than one million Dirhams then the initial rate will be 2.2%.

The above mentioned are the base rates that are tentatively provided and more offers are provided based on the good driving records. 

The insurance discounts and surcharges are applicable as follows.

• For ages between 23 to 25 years- discount/surcharge is applicable by adding 25%.
• For ages between 25 to 30 years- discount/surcharge is applicable by adding 15%.
• For ages higher than 30 years and lesser than 60 years- deductible surcharge at 10%
• If the UAE driving license is lesser than one year- discount/surcharge is applicable by adding a 25%
• If you have a sports car then a surcharge is applicable by adding 20%.         
• For cars higher than three years old then and by adding agency repair coverage discount/surcharge applicable is by adding 50%
• You can cover personal accident coverage by adding AED 120 to the driver coverage. By adding AED 30 for passengers accidental coverage can be made. 
• By adding AED 180 you can get a rental car as a courtesy in the event of an accident until your car gets repaired. 

The above-listed figures are subjected to the minimum premium requirement which is set by the UAE Insurance Authority. The figures are subject to change from time to time and are issued by the insurance authority. 

If there are no insurance claims then the insurance company will provide a benefit of discount on your insurance total cost. 

• For no claims for one year, you get a 10% deduction
• For no claims for two years, you get a 15% deduction
• For no claims for 3 years, you get a 20% deduction
• For no claims for four to 5+ years, you get a 25 to 30% deduction

A loyalty discount of 10% can be provided if the insurance owner retains the insurance with the same insurance company during the time of renewal. VAT of 5% is applicable as per the Federal law in UAE on all the insurance premiums. 

The above-listed figures are just indicators and the actual numbers will be different and based upon the time you take the insurance policy. You have to remember that different insurance companies charge different prices based upon the goodwill and add-on services they provide to the policyholder. 

New Driver Insurance Cost

For new drivers who are young between the age of 18 years to 25 years, the insurance cost is generally higher. Even for drivers who are above 25 years who are new to driving, the insurance quote is higher. We can say that for all the new drivers the car insurance cost is higher as compared to the experienced drivers. The reason for the high insurance cost for new drivers is that they have no driving experience. The insurance considers them as high-risk drivers and insurance is higher for new drivers. 

The car drivers who are living and working in Dubai are supposed to be covered by car insurance. There are two types of insurance: comprehensive insurance coverage and third party insurance coverage. Among these two for new drivers, third party insurance is the minimum amount of coverage that a driver can have. 

Insurance companies provide quotations to the new drivers which are upto 25% more on average which makes the insurance premium high for new drivers. 

Ways to reduce expense for New driver insurance cost

There are many ways in which the insurance cost can be reduced. First, decide on the insurance type that you want to choose either comprehensive or third party insurance. Keep in mind that third party insurance will cover only other vehicles and a comprehensive insurance plan will save your money and your car. Once you have decided on the type of insurance below are the ways to reduce expenses for new driver insurance costs. 

• Compare the insurance quotes

Have an ideal insurance plan by comparing the different car insurance quotes. The cost of insurance and features are different from company to company. Since new drivers do not have knowledge about insurance, some insurance companies take advantage of it and increase add on services thereby increasing the insurance cost. Compare different insurance quotes and select the best which fits your requirements.

• Driving behavior

Since new drivers do not have a driving history, it is important to have good driving behavior on the road which will help to reduce your premiums. Moreover, if you do not claim insurance in the past year then the insurance company will reduce your insurance premium next year.

• Additional drivers

By adding additional drivers to your insurance plans who have good driving experience and are more than 30 years of age will reduce your insurance cost. This will reduce the risk of loss for the insurance company and they tend to provide benefits to the new driver. 

Takeaway

New Drivers do not have the driving experience and this is one of many reasons that insurance cost is higher for the new driver. Having good driving behavior and selecting the cheapest car insurance will reduce the cost of car insurance. It is time-consuming and confusing for new drivers to understand car insurance. It is important that new drivers do basic research on car insurance in UAE and get the quotes as this will help them to save money on car insurance.