Cars have become more prevalent and important in our everyday life; it is more a necessity than a luxury. The new luxury is the ‘Insurance’. While the UAE RTA law mandates insurance policy to every car holder, not everyone who purchases it knows everything about insurance. For them, insurance is more like organic chemistry, they understand it’s organic but since there is chemistry involved, they don’t understand its formula. This article is dedicated to them all to help discern the formula of financial safety a car insurance policy can provide.
What is the concept of car insurance?
Car insurance is a yearly premium you pay for your car, that comes in handy when you least expect a serious enough accident to occur and is totally unprepared for it. It works pretty much the same as the life insurance except that you don’t receive your full premium back if your car is maintained clear – of accidents, damages, theft or the like. However, in such clean cases you may receive a substantial ‘No Claim Bonus’ amount, 20% of your premium in the first year to 50% in the sixth year.
Why should you insure your car?
While the purpose may be to pay for the damages after an accident or theft, the benefits of a car insurance are not limited to just that. Car insurance also provides liability protection if you accidentally kill or damage someone else’s life or property in an accident.
How much is the insurance price?
The insurance price generally equals to the market estimation of your vehicle. It is calculated depending on the IDV (Insured Declared Value) of your vehicle.
It is calculated as,
Insured Declared Value = (Company’s listed price – the depreciation value) + (Cost of vehicle accessories - the depreciation value of these parts)
**Depreciation value of your car is the decreased monetary value of it overtime due to wear and tear or obsolescence.
There, you can calculate the IDV amount for yourself simply using the online IDV calculator. For those who don’t understand the above formula, connect with our RSA agent to help you on that.
What are the types of car insurance available?
First and the best is the Comprehensive Insurance that gives high financial security and has a wider coverage including medical coverage for the driver and the third party in the event of accidents. It is slightly costlier but worth the money spend during unfavorable situations.
The other is, Third-Party Liability Insurance which has a lesser premium and therefore have fewer benefits. It covers only the third-party car and passengers during accidents and yes, you’ll have to pay in extra for rectifying your car’s damages.
What all does your car insurance cover?
For the most part, a comprehensive car insurance plan covers the following:
• Damages caused to the vehicle due to earthquake, flood, storm etc.
• Loss due to man-made disasters like accidents, theft, riots, strikes and malicious acts
• Third-party liability
• Personal accident cover for the driver.
What your car insurance does not cover?
Usually an insurance plan doesn’t cover,
• Damages to the car due to drunk and drive
• Deliberate damages caused to the vehicle
• Destruction due to a war or nuclear attacks
• Damages when driven by an uninsured person
• Normal wear and tear.
How to apply for car insurance?
Approach the insurance agency in person or online and your insurance agent will guide you through the rest of the process. All you require to apply for an insurance is to present copies of certain necessary documents such as your driver’s license, registration card of your vehicle, passport photo page and visa page if any, as a proof of your identity and driving experience.
What is the claiming procedure?
Firstly, know that there’s only a short window of time open for filing a claim after an accident or a theft. Submit a police report with a brief description of the damages occurred along with essential documents like the driver’s license and the registration card of your vehicle. Submit a copy of the same to your insurance agency via the contact details provided by the agency. Based on the benefits specified on your insurance policy you receive settlements of the claim.
What should you know before buying an insurance?
Compare the various insurance providers through an online research to choose the one that best suits your requirements. Know to ask if the insurance includes emergency services in case of flat tires or running out of fuel and have off-road travel coverage. Also know about agency repair along with garage repair, wherein the car gets to undergo repair in the manufacturer's garage. That way you can rest assured that your costly car can come back to you as new as you had brought.
A hint to make things easier for you – RSA has over 60 years of experience in helping customers have great motoring experience in the Middle East and can guide you pick the best plan based on your actual requirement and your risk capacity.