Why is Car Insurance in Dubai lower than in other Gulf Countries?
Why is Car Insurance in Dubai lower than in other Gulf Countries?
Recently - over the past two years - from 4th quarter, 2019 to 2021, UAE witnessed a decrease in the car insurance rates up to 50% compared to the rest of the Gulf countries.
Car insurance policy “against third parties”for “Sedan” Cars registered lowest price 299 AED, where the same policy for the same car in Saudi Arabic reached 650 SR.
InOman, the average insurance price "against third parties" - according to companies' online offers - was 55 Omani riyals.
As for sedan cars 4 cylinders, 6 cylinders and 8 cylinders for the same type of insurance, the minimum price in the UAE was 299 AED, 375 AED and 425 AED.
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Reasons for the low average price of car insurance policies of all kinds, as per Mr. Farid Lutfi, Secretary General of the Emirates Insurance Association are due to:
Companies seek to collect financial benefits for insurance policies, especially at the end of each year, to meet their obligations.
There are a large number of companies specialized in car insurance. Car insurance and health insurance represent 80% of the total insurance sector.
High competition between companies to sell insurance policies via the Internet and social media.
The presence of unknown insurance companies in the market and companies from outside the country.
Mr. Farid assured that the current situation will change for the better by the end of 2022, he urges beneficiaries to search for services provided by insurance companies instead of searching for the lowest prices. He pointed out that Emirates Insurance Association held discussions regarding pricing procedures for auto insurance policies in the local market and presented its recommendations to the regulatory authorities.
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Insurance policies price are lower in UAE due to two man reasons, which are:
Customers tend to get the lowest price offered by car insurance companies, regardless of the services provided and the extent of the policy's coverage of risks.
High competition in this field, as there are lots of insurance companies from outside the country offering their services at the lowest prices through social media, sacrificing the percentage of commission they get after selling each policy.
