When it comes to car insurance in the United Arab Emirates (UAE), two primary options stand out - third-party car insurance and comprehensive car insurance. These two types of insurance plans offer varying degrees of coverage and benefits. In this article, we'll discuss the key differences of both these types to help you make a more informed choice.
Third-Party Car Insurance - The minimum mandatory requirement
Third-party car insurance is the minimum, mandatory legal requirement set forth by the UAE Insurance Authority for everyone who wishes to drive a vehicle in the UAE. This requirement is in line with Federal Law No. 6 of 2007 concerning the establishment of the Insurance Authority and organization of its operations. A third-party plan protects a driver against financial liabilities arising out of an at-fault accident. The compensation generally is inclusive of third-party damages, bodily injuries and death.
Comprehensive car insurance in the UAE ensures coverage against a wider range of risks compared to third-party insurance. The benefits usually include cover for damages to your own vehicle due to accidents, theft, fire, vandalism, and natural disasters. The comprehensive plan can also extend to personal injury and medical expenses of the insured driver and passengers if your policy includes it.
Comparing Coverage Scenarios
Accident Liability:
Third-Party: Covers liability towards third parties' injuries and property damage.
Comprehensive: Covers third-party liabilities and damage to your own vehicle.
Personal Injuries:
Third-Party: Does not cover personal injuries of the insured or passengers as standard.
Comprehensive: May cover medical expenses resulting from accidents.
Vehicle Protection:
Third-Party: Does not provide coverage for damages to your vehicle.
Comprehensive: Protects against various risks, including accidents, theft, and more.
Comparison Between Third-party Car Insurance and Comprehensive Car Insurance
|
Aspect |
Third-Party Car Insurance |
Comprehensive Car Insurance |
|
Coverage |
Provides coverage for third-party liabilities. |
Provides coverage for both third-party liabilities and damages to your own vehicle. |
|
Third-party property damage and bodily injury |
Covers injuries/death/damage caused to others. |
Covers injuries/death/damage caused to others. |
|
Own Vehicle Damage |
Does not cover damages to your own vehicle. |
Typically covers damages to your own vehicle due to accidents, theft, fire, and more. |
|
Personal Injury Coverage |
Does not usually cover your own medical expenses as standard. |
May include coverage for your own medical expenses resulting from an accident. |
|
Passenger Coverage |
May cover third-party passengers' injuries. |
May cover third-party & family passenger injuries. |
|
Theft and Vandalism |
Does not cover theft or vandalism of your vehicle. |
Usually covers theft and vandalism of your vehicle. This is available at a small premium. |
|
Fire Damage |
Does not cover fire damage to your vehicle. |
Usually covers fire damage to your vehicle. |
|
Natural Disasters |
Typically does not cover natural disasters. |
Some policies may include coverage for natural disasters like floods and earthquakes. |
|
Agency Repair |
Not applicable |
May include coverage for repairs at authorized dealerships or preferred garages. |
|
Towing and Roadside Assistance |
Often not included, or available at extra cost |
Often includes towing and roadside assistance services. |
|
Rent-a-Car Coverage |
May be available at extra cost |
Depending on your policy, this may be provided with your policy or at an additional cost. |
|
Personal Belongings Coverage |
Typically not covered. |
May include coverage for personal belongings damaged or stolen from the car. |
|
Premium Cost |
Generally lower premium compared to comprehensive insurance. |
Usually higher premium due to broader coverage. |
|
Suitability |
Recommended for older vehicles with lower value, or as a more budget friendly option. |
Suitable for newer or valuable vehicles to ensure comprehensive protection. |
|
Takaful insurance options |
Available |
Available |
Conclusion
If you’ve been considering choosing between third-party plans and comprehensive plans, then understanding their extent of coverage is a good place to start. While third-party insurance is to fulfill the minimum legal requirement and ideal for older vehicles, or as a more budget friendly option. Comprehensive insurance plans offer protection for a wider array of risks. By comparing both the options and assessing your needs for car insurance, you’ll be able to decide an option that’s suitable to your needs and your pocket. You can also visit our quotes page to take a detailed look at the plans and select one that’s right for you and your vehicle. Remember, the right plan is one that ensures legal compliance and adequate protection of your valuable asset.
