The UAE Insurance Authority (IA) has announced a slew of changes to motor pricing rules that provide for discounts to be granted to good drivers and loyal customers as well as those who operate a fleet of vehicles or an electric vehicle.
UAE drivers who have an accident-free record with no insurance claims are getting rewarded as their premiums are reduced from the beginning of this year, reported Khaleej Times.
Mr Sultan bin Saeed Al Mansouri, Minister of Economy and Chairman of the IA, said these revisions to the pricing rules would encourage policyholders to drive safely and reduce the death rate from road accidents. He added that the new tariff provisions would enhance competition in the local market and encourage insurers to provide the best services at competitive prices.
Under the revisions, the insurer shall grant a reduction of the premium at the rate of 10% of the minimum premium to the owner of a vehicle which has not led to a claim during the previous insurance year; 15% for a vehicle without a claim for the previous two years; and 20% for a vehicle without a claim for the previous three years.
The insurer shall also grant a 10% discount on the minimum premium as “a loyalty reduction to the company’s customers” at the time of renewing their insurance policy with the same insurer, provided that the policy is not transferred to another person, the Authority said.
Another amendment provides for an insurer to grant a reduction of up to 30% of the minimum premium for a customer who operates a fleet of vehicles, including motorcycles. A fleet is defined as “five or more vehicles or motorcycles owned by one natural person or a legal person”.
In addition, the new amendments grant a reduction of up to 25% of the premiums for vehicles running on gas and electricity, taking into account accidents caused by the vehicle which had led to claims at the renewal time.
Nevertheless, when there is more than one reason for a premium reduction, only the highest rate of reduction shall apply.
Going forward, Mr Al Mansouri emphasised that the IA will continue to monitor the performance of insurers and the extent of their commitment to apply the tariff regime and rectify practices not in accordance with the law, regulations and instructions. M