UAE motorists are paying an average of nearly 15 percent more for their fully comprehensive car insurance in 2017 than they were last year, according to an analysis from compareit4me.com, the Middle East-based comparison site.
The increase comes as a result of new tariffs from the UAE Insurance Authority that were introduced on January 1, it said in a statement.
The new tariff system sees UAE insurers adopt minimum comprehensive insurance premiums of AED1,300 for saloon cars and AED2,000 for SUVs.
Compareit4me data also showed that the share of third-party policy sales doubled in the January-February 2017 period, compared to the last two months of 2016, suggesting more UAE residents are being priced out of fully comprehensive policies.
In December, a compareit4me report predicted that the new tariffs would leave 35 percent of UAE drivers worse off but an analysis of data from policies sold in January and February shows all drivers are now paying more for their fully comprehensive policies.
“Our research shows that SUV drivers are paying anywhere between 2.3-40.5 percent more – depending on the value of the car - for their fully comprehensive policies in 2017 than they were in 2016. For saloon drivers, again depending on the value of the car, the increase ranges from 4.6-19.3 percent,” said Radhika Agnihotri, insight analyst at compareit4me.com.
Agnihotri said the worst hit are drivers of SUVs valued at AED50,000 or under, with comprehensive policies for these cars now 40.5 percent more expensive, on average, than they were in 2016.
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In dirham terms, this means that owners of SUVs valued at under AED50,000 are now paying an average of AED618 more for their fully comprehensive policies compared to last year.
Owners of saloon cars worth between AED100,000-150,000 have also seen steep increases – this group is now paying an average of 19.3 percent (AED711) more, the research showed.
“It seems that insurers have taken the new tariffs as an opportunity to raise prices across the board – not just on policies valued at below the new minimum premiums. This is understandable, however, given that the new rules set out by the Insurance Authority also provide more comprehensive protection for UAE drivers,” said Jonathan Rawling, CFO at compareit4me.com.
“For example, the minimum cap on third-party property damage has been raised from AED 250,000 to AED 2 million. Because insurers don’t yet know how much these extra protections will cost them, it makes sense that they have raised prices for everyone.”