UAE: Can I be denied car insurance based on my traffic violations?
Find out the factors that affect auto insurance coverage and eligibility
Dubai: Can an insurance company deny car insurance if you have too many fines or traffic violations on your file? Your driving record is one of the most important aspects an auto insurance provider will look at when you are applying for insurance, according to industry experts who spoke with Gulf News. But that does not mean that you can be denied insurance coverage because of a poor traffic record.
However, according to experts, your traffic history can affect the type of coverage you get and the premium you have to pay. Here is all you need to know.
You may be only eligible for third party insurance
According to Hitesh Motwani , the chief marketing officer at InsuranceMarket.ae, you cannot be denied car insurance coverage completely.
“You will be offered a third-party coverage instead. Insurers may deny a comprehensive policy in case of adverse driving history. But we generally don't see this in practice unless it's a high performance vehicle,” he said.
You will be offered a third-party coverage instead. Insurers may deny a comprehensive policy in case of adverse driving history. But we generally don't see this in practice unless it's a high performance vehicle.
What to do if I am denied insurance?
If you are denied car insurance, you can file an insurance related complaint with the UAE’s Central Bank.
“The individual can file a complaint to the Insurance Authority with all relevant documents (car registration card, driver’s licence and Emirates ID) to review their case, to at least ensure the car is covered for basic or third party insurance to get the car registered,” Madiha Asif, team leader and business analyst at Nexus Insurance Brokers, said.
What is third-party insurance?
“Third party insurance is the most basic insurance [cover] to comply with UAE Law, insuring an individual’s liability against any bodily injury and property damages to any third party caused by the used of an insured vehicle,” Asif said.
Third party insurance is the most basic insurance [cover] to comply with UAE Law, insuring an individual’s liability against any bodily injury and property damages to any third party caused by the used of an insured vehicle.
Comprehensive or third-party insurance? Depends on the type of car
Your likelihood of being denied a comprehensive cover may increase in case you are planning to buy a luxury vehicle or sports car.
“For high performance vehicles, typically valued over Dh500,000, insurers may want to review full driving history before deciding on the premium to be charged along with the decision on whether a comprehensive cover will be offered or not,” Motwani said.
He added that if it is a standard vehicle, there are insurers who offer comprehensive cover without really looking at the history of the driver too.
“Another example where insurers deny comprehensive cover is when the vehicle is non-GCC (Gulf Cooperation Council) specification, but that is not related to driving history,” he explained.
GCC specification or GCC spec cars are designed to withstand the climate and roads of Gulf countries.
Pros and cons for third-party insurance
“The pros of insuring the car as third party are protection against legal liability and financial losses, compliance with legal requirements, and lesser cost compared to comprehensive insurance,” Asif said.
However this type of an insurance cover is limited. According to Asif, if you have third-party insurance cover, you will not be covered for damages that happen to your own car, in case you cause an accident.
Asif explained that while comprehensive insurance, also known as ‘full insurance’, is more expensive than basic insurance, it protects you from losses incurred from accidents, even if it is your fault.
“It provides coverage for damages to the insured car due to accidental collision, overturning, fire, external explosion, self-ignition, burglary, theft, cost of repairs and replacement of the insured car, whether the individual is at fault or not,” she said.