For anyone who owns a car in the UAE or is planning to buy one soon, car insurance isn’t a topic that can be ignored. But even with thousands of car insurance policies being sold to car owners every day, how many of us actually spend time evaluating our options before buying one, or reading the policy document afterwards?
The finer details of how your policy works, as well as its limitations, exclusions, terms and conditions, can be found within the small print. If you’re not aware of these details, you could end up having your claim rejected or unknowingly invalidate your policy. For this exact reason, it is important that you check the policy wording before signing up for a car insurance plan.
The Souqalmal.com team is helping car owners understand the nitty-gritty of car insurance policies through a series of articles that shed light on some lesser-know facts about car insurance. Keep reading to find out more…
Off-Road Cover
Interested in off road adventures? Make sure you opt for an off road add-on insurance cover that’s actually worth the extra expense. Don’t forget to check the limitations to the off road cover in your policy – Some policies may limit the coverage in terms of distance from a paved road, with the allowed upper limit being anywhere from 10 meters to 1 kilometer.
Depreciation
Most of us are aware of the fact that cars depreciate in value over time, but do you know how insurance companies fix the depreciation rate for your car when calculating its current value? In some cases, this depreciation percentage used by the insurer is higher than optimal. Be sure to ask the insurer what percentage they are using to calculate depreciation. Remember, this is an important factor that directly affects your payout if the car is deemed a total loss after an accident.
Deductible
The decision to pick a policy with a high or low deductible or no deductible at all is up to you. But it is important to understand that sometimes a low insurance premium is a direct result of increasing the deductible. And higher the deductible, higher will be your out-of-pocket expenses when making a claim. Be sure to check the deductible if you see a policy that’s being advertised at a considerably low premium.
Vehicle Modifications
Failing to inform your insurance company about any car modifications made during the course of the policy can result in your policy being cancelled and any claims being rejected. Once you inform the insurer, it is up to the insurer to include the modified parts in your current policy. Be prepared to pay an additional premium for the extended coverage.
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Car Valuation
When generating an insurance quote, the insurer calculates the value of the car once you enter the model and make details. But, did you know that you could change the value of your car within a certain margin instead of simply going with what the insurance company calculates? This is especially useful when insuring a used sports or luxury car, which may be valued by the insurer much below their market value.
Quality of Repairs
Opting for garage repair instead of agency repair? It is important to check which garage the insurer covers, and how is the quality of repairs carried out by this garage. The insurer is responsible for ensuring that all repairs are carried out to a good standard. It may also be worthwhile to check if the insurer offers premium garage repair when comparing policies.
Spike in Renewal Premium
You may be in for an unpleasant surprise when you go to renew your insurance policy. Your insurance premium may go up for a variety of reasons – Past claims for accidents where you were at fault, poor driving record reflected in RTA fines, and so on. Remember, that you always have the option to choose a new insurance policy instead of renewing with the same insurer.
Natural Disaster Cover
One of the big advantages of choosing a comprehensive insurance policy instead of a no frills third-party liability one, is that your car is covered against loss or damage due to natural disasters. But don’t assume that the coverage extends to all natural perils. Check with the insurer about the details related to coverage beforehand.
Delay in Filing a Claim
Was your car involved in an accident? It is in your best interest to file an insurance claim as soon as possible. Any unreasonable delay in filing the claim could jeopardize the claims process and result in your claim getting rejected. Ask your insurer – Within how many days do you have to report the damage.
Documentation
Most of us discuss our policy details with insurance agents over the phone. But you shouldn’t simply take the word of the insurance agent, be sure to have all details of your policy mentioned in black and white. With no proper documentation and no proof of communication, you may not get the benefits that you’re paying for.
Auto-Renewal of Policy
You may have signed up for auto-renewal of your car insurance policy with your bank. And even though this may seem like the convenient option, it can end up costing you more in terms of higher insurance premiums. Alternatively, comparing insurance policies can get you better value for your money.
