UAE: Regulator draws up insurance framework for hybrid & electric vehicles
Source: Middle East Insurance Review | Jan 2019
The UAE Insurance Authority (IA) is developing a seamless integrated framework for the provision of insurance for hybrid and electric vehicles.
The regulator is currently coordinating with the relevant authorities, including the Emirates Authority for Standardization & Metrology (ESMA), to formulate requirements for the market, Mr Ebrahim Obaid Al Zaabi, director general of the IA, told Al Roeya.
The development of the Integrated Insurance Policy Framework will contribute to providing a clear vision for insurers so that they can grow their business at competitive prices.
Mr Abdulla Abdul Qader Al Maeeni, director general of ESMA said the regulations are being drafted for the introduction of non-conventional vehicles into the market and to regulate them, so as to increase the confidence of insurers in providing coverage for these vehicles.
Some owners of hybrid and electric cars have said that they have failed to obtain insurance coverage for their vehicles as several insurers had rejected their applications for insurance or had quoted an exorbitant premium to provide insurance.
A comprehensive system of accreditation for hybrid and electric vehicles and other non-conventional vehicles would make insurance transactions smoother, said Mr Ramez Abu Zaid, chairman of the Motor Insurance Committee of the Emirates Insurance Association.
He denied that there is reluctance on the part of insurers to provide insurance cover for these type of cars, as they do offer such covers on their websites. Insurers maintain their profitability in this line of business by pricing their motor insurance products in accordance with their financial policies and costs.
He added that the most important challenge facing insurers in pricing is the difference in the value of hybrid or electric cars compared to conventional vehicles, especially the high value of the battery charger, which is equivalent to half the price of the car and the difficulty of obtaining spare parts which also increases the cost of compensation. M