New tariff rates will be introduced as companies pass on the cost of ambulance services and courtesy cars to customers.
Motorists will pay more for their car insurance from January 1 when new tariff rates are introduced and companies pass on the cost of ambulance services and courtesy cars to customers. New maximum and minimum premiums will be set for third-party and comprehensive policies, depending on vehicle type.
The UAE Insurance Authority has issued a new vehicle insurance tariff system, on which premiums are based. The new regulation, effective from January 1, 2017, supersedes an existing circular that has been in place since 1996. “It’s pretty straightforward,” said Frederik Bisbjerg, executive vice president of Mena Retail at Qatar Insurance Company.
“The insurance regulator has given us parameters to work with so we have to set limits under the scheme. “The minimum has been increased, which is good for the insurance companies because there has been a lot of competition, especially for cars of lesser value.” The new system includes unified motor vehicle insurance policies against third-party liability and against loss and damage. The tariff will include additional bolt-on premiums to cover the cost of ambulance services and medical evacuation to hospitals.
“Across the board, everybody will have to pay a somewhat higher premium because we insurers have to offset the ambulance fees, which we’ve already done, and the 10-day replacement vehicle,” Mr Bisbjerg said. “This is part of building up the reserves of insurance companies so we can pay for the claims that we are obligated to do.” It will be mandatory for insurance companies to give policyholders compensation equivalent to the cost of a replacement car after an accident for a maximum of 10 days or pay out up to Dh300 per day for a rental.