The UAE Insurance Authority (IA) has confirmed that insurers have to provide the motor accident record of policyholders free of charge, regardless of whether the policy is in hard copy or in an electronic format.
Some policyholders have been complaining that several insurers are charging them AED100 ($27.23) for each certificate about their past accident and driving record.
“Under the previous regime, insurers would traditionally charge their customers an administration fee for providing a no-claims certificate,” said Mr Jonathan Rawling, CFO of Middle East comparison website yallacompare.com.
“We are aware that some insurers are still charging for these certificates. If you encounter this, we’d point you towards the IA website to lodge a complaint,” he added.
Meanwhile, UAE consumers are also being urged to take advantage of no-claims discounts on their motor insurance, following amendments to the country’s insurance regulations that came into force at the beginning of 2018.
Given the lack of sophisticated pricing methodologies among the majority of insurers in the UAE, the regulator has stepped in to mandate the inclusion of a customer’s driving history when determining pricing, according to Mr Rawling.
“Many insurers do not adjust the premium at all based on your previous driving experience – regardless of whether or not you have a no-claims certificate, which states you haven’t made a claim on your car insurance, and are therefore less risky to insure. It’s one of the most obvious examples of a relative lack of pricing sophistication in the Middle East’s insurance industry,” he said.
“The IA has recognised the issues with this, and in its latest regulation amendments, has mandated that insurers give discounts for drivers who haven’t claimed on their policies and want to renew.”
The amendments to the new tariff regulations state that those with claim-free insurance records are eligible for discounts of up to 20% on renewal of policies. “Under the new rules, if you haven’t made a claim, you have a right to a free certificate to prove it,” he said.
It is expected that the new rules will also encourage competition. To win the business of safe drivers, other insurers may adjust their prices to accommodate no-claims discounts, so long as safe drivers can provide their no-claims certificates. “This will give the insured more freedom to move if they choose to,” said Mr Rawling.
The new regulations also bring in possible discounts for coverage on motorbikes and electric vehicles. Benefits for fleet owners are also included in the amendments.
Distance and driving style
“These measures are an important first step on the journey towards fairer pricing. However, there are still further improvements that can be made. Most pressing, we think, is the need to include distance driven in any insurance premium calculation,” said Mr Rawling.
Some UAE insurers are taking positive steps towards more sophisticated pricing methodologies. One or two have begun investigating the use of a mobile phone app that monitors driving styles. Those that agree to run the app while driving, to prove they are safe drivers, can benefit from enormous savings on their premiums. M
AED1 = $0.27