The Insurance Authority has issued a new vehicle insurance tariffs system, which stipulates minimum and maximum premium for motor vehicle insurance.
According to a representative from an insurance firm, premiums from across categories will drop anywhere between Dh100 to Dh150.
Mahesh Chittral, customer service officer from Gargash Insurance, said: "The new circular is indeed a welcome among the UAE residents as...more benefits have been added to a person less at fault (in cases of accidents)."
One welcome benefit is that insurance companies will have to arrange an alternative car for the not-at-fault party for 10 days while his/her car is being repaired after an accident. If not, the company will have to pay Dh300 per day to the person, said Chittral.
The board of directors of the Insurance Authority on Sunday issued the new tariffs, which are developed on the basis of the new regulations for unifying motor vehicle insurance policies, issued in September. The new tariff system will be effective from January 1, 2017.
The regulations include the unified motor vehicle insurance policies against third party liability and against loss and damage.
The system grants the insurance companies the freedom of competition by offering prices, based on their respective experiences with the customers, on technical or actuarial reasons.
The tariff will include additional premiums, resulting from the costs of ambulance services and medical evacuation to hospitals. The insurance companies may not levy or charge additional amounts, without a resolution by the Insurance Authority.
The authority retained the maximum premium for policies against comprehensive liability and against loss and damage for saloon vehicles at five per cent.
According to the table released by the authority, the minimum premium for a third party liability insurance policy for a four-cylinder private saloon car will be Dh750 while the maximum will be Dh1,300. The premium goes up, based on the capacity of the engine's horsepower, to a minimum of Dh1,300 for an eight-cylinder motor vehicle, for which the maximum will be Dh2,100.
However, the minimum premium for a comprehensive (full) insurance policy for a private saloon car is fixed at Dh1,300.
For a four-cylinder 4x4 vehicle, the premium for a third party liability insurance policy will range from Dh1,000 to Dh1,750. And the minimum premium for a comprehensive insurance policy for a 4x4 car has been set at Dh2,000.
(With inputs from Wam)
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