There are a number of insurance companies spread across the UAE that offer comprehensive automobile insurance to residents with a UAE driving license and brand new or second-hand cars. And since it’s mandatory by law that all types of vehicles operating on the UAE roads must have at least a valid car insurance third-party liability, having a variety of options to choose from indeed becomes a blessing. Now with the market being flooded with different car insurance companies, the growing competition has led to competitive pricing for motor insurance products as well as variation in offers and coverage features. However, all these products and services ultimately adds to the amount you need to pay when purchasing your car insurance.

Now you might be wondering, “how do companies calculate car insurance rate?” or “What goes into the making of that final car insurance quote?” Well, read on as we list out the different factors that are responsible for your overall spends and how, based on this, you can make better informed decisions and even negotiate the best deals. Apart from familiarizing yourself with the new minimum and maximum caps on car insurance tariffs, your overall rate is also affected by the below mentioned factors. Among the list, you will find many pointers that you can control, while there are others that you simply cannot and are unavoidable. Read on to find out more:

Age, Driving Experience and Nationality

When calculating your car insurance premium, age does play a considerable factor. If you are a driver categorized between the age bracket of 18 and 25, then chances are that you will be entitled to pay around 15% to 20% higher on your car insurance premium. This also applies to new drivers on the road who possess a driver’s license that’s less than a year old. These couple of factors have been put in place on the premise of the lack of experience on the road which in turn, make them more vulnerable to road mishaps and accidents. This information has been derived from statistical correlation between frequency of accidents and the age of the drivers behind the wheel. In many cases, the same is relevant to certain nationalities.

Accident and Traffic Fine History

Besides just keeping you and your loved ones safe while on the road, your road discipline definitely has an impact in the long run too! Besides paying up the heavy fines, the rough time you’ve had while on the roads ultimately reflects on the premium of your car insurance. Which means, receiving tickets, being in car accidents or violating any road rules will have you paying extra money when calculating the car insurance rate. The reason behind this is that motor insurance companies will assume that you are likely to claim the same in the future while being insured under them. This certainly drives the premium up. On the other hand, a clean driving record will allow you to make the most of the no-claims discount.

Vehicle Age and Coverage

Besides the driver’s age being taken into consideration by companies when calculating car insurance rate, the age of your vehicle also plays an important factor. Your brand new, shiny car would be more expensive to repair or even replace if need be and hence the comprehensive coverage becomes greater but that’s only because you won’t have to pay heavily from your own pocket in the event of an ill-situation. On the flip side of this however, old cars or second-hand automobiles can be protected with the minimal third-party liability cover. To sum it up, the older the car, the lighter the insurance rate is for you.

Vehicle Type, Model, Variant and High-End Features

Apart from just the age of your car, the type of vehicle you drive also directly affects the car insurance premium rate. Luxury rides, sports variants and other expensive cars have exclusive spare parts that cost more than your usual ride to repair or replace altogether. Also, if your car zooms swiftly on a larger engine, then it is relatively going to be more expensive to insure. However, there is a silver lining here as insurers do consider the safety features and ratings of each car model which help make it safer to drive on the roads of Dubai and hence automatically lower the premium.

Agency and Non-Agency Repairs

The term Agency Repairs means your vehicle can be repaired by the official dealer of the car brand while Non-Agency Repairs are the repairs carried out on your vehicle by an external garage that’s appointed by the insurance company. As per your preference, the Agency Repairs is added to your policy but with an additional cost tag.

Optional Benefits and Additional Features

For any additional add-ons, there is an extra cost added to the final car insurance rate. Some of these include:

• Personal accident cover for the driver and passengers.
• Roadside assistance or recovery breakdown
• Off-road cover
• Rental or alternative vehicle cover
• Geographical area extension cover, to places like Oman, etc.
• Fire, floods, earthquake and other natural calamities.


Owning and driving a vehicle in the UAE is no longer a luxury but a necessity! Commuting around in your car leaves you with plenty of time to tackle other errands and even enjoy some quality time for yourself and your family. But there are plenty of factors that have to be taken into consideration while scouting for that perfect car. And once you’ve selected your dream drive, your next step is to seek out a worthy insurance company from the plenty of options that’s available in the motor market.

For further assistance, you can visit BankOnUs to find the best deals on car insurances in the UAE.

Share this article :