The UAE Insurance Authority (IA) has adopted a new unified regulation for vehicle insurance policies covering civil liability and loss and damage, according to a statement issued by the regulator.
Sultan bin Saeed Al Mansouri, Minister of Economy and Chairman of the IA, hailed the new regulation as an important milestone in the development of organisational and technical rules for boosting the performance of the UAE insurance market, vehicle insurance, and the protection of policyholders’ rights.
Previously, there were separate provisions for mandatory motor third-party liability insurance and optional comprehensive insurance. The new rule introduces a unified policy for the two types of cover.
“The unified regulation of the vehicle insurance policy against civil liability and the policy against loss and damage contains numerous benefits for policyholders and the domestic market,” said Mr Al Mansouri.
“The new regulation supports the legislative base of the insurance sector of the UAE and entities operating therein, according to legal, technical, and financial strong grounds. It increases the sector’s competitiveness at the regional and international levels in accordance with the best prevailing international practices,” he said.
“The issuance of this unified regulation comes after more than 27 years of work using the two vehicle insurance policies issued in 1987, and after several amendments to them during that period,” he pointed out.
Coverage
The new system increases insurance coverage related to any claim arising from an accident that causes damage to property to AED2 million (US$544,573) from AED250,000.
In addition, a new provision stipulates that motorists involved in accidents have the right to receive a daily amount of AED300 for 10 days to rent a vehicle.
The new policy includes additional deductible amounts decided by the insurance company, which can be set at a maximum of 10% of the compensation value if the driver is under 25 years of age, a maximum of 15% of the compensation value for public vehicles and taxis, and a maximum of 20% for sports and modified vehicles.
In case of the death of one member of the insured family, or the driver of a rented vehicle, or public vehicle, or a driving-learning vehicle, the insurance company is liable to pay AED200,000 for each fatality. In case of injury, the liability of the insurance company will be paid according to the extent of the disability.
The insurance company is obliged to repair the damaged vehicle and pay the market value of the vehicle if the vehicle repair cost exceeds 50% of the car’s market value, provided the insurance company’s liability does not exceed AED2 million.
Husbands, wives, children and parents will be included in the insurance coverage. A passenger is defined as a person who was inside the vehicle or getting in or off the vehicle. The maximum limit of insurance company liability to any claim arising from one accident is the value determined by a court.
AED1 = US$0.27