Under new regulations, UAE drivers are entitled to discounts of up to 20% on their insurance renewals, says yallacompare
Safe drivers in the UAE, who haven't lodged a recent claim on their car insurance, can avail of discounts of up to 20% on their renewals, following amendments to the country's regulations that came into force in January this year.
Jonathan Rawling, CFO of Middle East comparison website yallacompare.com, said the lack of sophisticated pricing methodologies among the majority of insurers in the UAE led to the regulator stepping in to mandate the inclusion of driving history when determining quotes
"Many insurers do not adjust the premium at all based on your previous driving experiences - regardless of whether or not you have a no-claims certificate, which states you haven't made a claim on your car insurance, and are therefore less risky to insure," said Rawling.
"It's one of the most obvious examples of a relative lack of pricing sophistication in the Middle East's insurance industry.
"The UAE Insurance Authority has recognised the issues with this, and in its latest regulation amendments, has mandated that insurers give discounts for drivers who haven't claimed on their policies and want to renew."
As well as being eligible for discounts of up to 20% on their renewals, those with claim-free insurance records are entitled to a no-claims certificates from their insurer free of charge.
"Under the previous regime, insurers would traditionally charge their customers an administration fee for providing a no-claims certificate," Rawling said.
"We are aware that some insurers are still charging for these certificates. If you encounter this, we'd point you towards the UAE Insurance Authority website to lodge a complaint," he added.
While the new regulations will offer added benefits for drivers, Rawling said there are still further improvements that can be made when it comes to including distance driven in any insurance premium calculation.
"The one example we always use is that, all other things being equal, a person driving to Abu Dhabi and back every day will pay the same amount for insurance as someone driving between Dubai Media City and Dubai Marina every day," he said.
"That means the person doing the short journey is effectively subsidising the risk of the person driving hundreds of kilometres every day."
He said some UAE insurers are taking positive steps towards more sophisticated pricing methodologies.
One or two have begun investigating the use of a mobile phone app that monitors driving styles. Those that agree to run the app while driving, to prove they are safe drivers, can benefit from enormous savings on their premiums.
"This is a welcome development, and on par with what we're seeing from some of the more advanced insurers in Europe," Rawling said.
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