If you own a car in the UAE you have probably bought car insurance and then forgotten about it for the next one year. Even though you might be getting a good night’s sleep thinking your car is protected, are you convinced that your policy is the ‘right one’?
How do you ensure that you get the right insurance coverage for your needs? Simple, by avoiding these seven common mistakes…
You go with the cheapest option
Legally you are good to go if your car has at least the basic minimum level of insurance coverage – third party liability insurance (TPL). But is this basic protection adequate to cover the costs should there be an accident? While TPL insurance pays for the damages to other parties, any damages to your car will have to be paid for, from your own pocket.
Even when it comes to comprehensive insurance, the cheapest option may be a direct outcome of heavily reduced coverage, high deductibles or a very low car valuation. The cheapest option may not give you the coverage you really need and will probably cost you more in the long run.
You buy a very expensive policy
On the other end of the spectrum, expensive does not always mean better. If your insurance policy is considerably more expensive than others in the market, it’s time you revisit this expense and research your options when it’s time to renew. If you drive less frequently or your car is only worth a fraction of its original value, you could cut down on your coverage. You can do this by skipping the extra features and optional benefits in your policy that you don’t foresee yourself using.
[Related: How is your car insurance premium calculated?]
You don’t compare your options
With dozens of insurance players in the market, you have plenty of providers to choose from, so why not hunt for a good deal? Do your research by comparing policies from multiple providers while keeping the coverage and cost the same for an apples-to-apples comparison. On the Souqalmal platform, you can submit your car insurance requirements, see the insurance options you’re eligible for and get connected directly with multiple insurance providers.
You rely on unregulated insurance middlemen
Unlicensed insurance agents or middlemen may not have your best interests in mind when they offer you an insurance policy. They’re most likely driven by commissions, and would recommend providers who pay them a higher commission. Then there’s also the additional risk involved in paying for your policy to these middlemen, especially in cash. Your payment may never reach the insurance company, and you risk having your policy cancelled or downgraded.
Your deductible is too high/too low
Deductible is the amount that you pay before your insurance kicks in. The general rule of thumb is higher the deductible, lower the premium. The question is would you rather pay a higher premium or more money out of your pocket in the event of an accident? Do the math and choose a policy with a deductible amount or percentage, that you would be comfortable paying.
[Related: Why your car insurance claim won’t be accepted]
Your car value is too high/too low
Most insurance providers will put an estimate on your car value when you apply for a policy. However, this is simply an estimate and you may be able to increase or decrease this value within a certain range. You must choose the most realistic market value so you don’t end up getting the wrong coverage. In case your car valuation is too high, you could end up with a more expensive policy, but your total payout (based on current market value) may still be low if your car is declared a total loss.
You are buying insurance from the car dealer
If you just bought a brand new car from a local dealership, you might have already been offered a car insurance policy. Even though this may seem easy to grab, this is most likely from your automobile dealers’ preferred insurance partner. You can always use an online platform like Souqalmal to review all your options and get in touch with insurance providers to compare multiple quotes.