Commercial car insurance premium rates have increased by more than 300% since the beginning of the year. The spikes in motor premiums affect all vehicle categories, large and small as well as those of high-value and medium-value

For example, the lowest comprehensive car insurance premium used to be around AED1,000 ($272.26) a year, but it has increased to AED4,000 this year, reported Al-Emarat Al-Youm.

At the same time, luxury car owners say that they encounter difficulty finding insurers willing to insure their vehicles. The number of insurance companies willing to provide insurance for their vehicles, especially comprehensive motor insurance, is limited. As an example of price hikes, the premium for a comprehensive auto insurance policy for a car worth AED1m was AED15,000 in 2024 but has jumped to AED65,000-70,000. One consequence is that some insurance companies are proposing to reduce the market value of a luxury car to lower the motor insurance premium.

Mr Mohammed Mazhar Hamadeh, vice chairman of the Higher Technical Committee and chairman of the Motor Insurance Technical Sub- Committee of the Emirates Insurance Association, says that insurance companies have raised motor insurance prices for corporate vehicles, as well as luxury cars, because of the significant losses they incurred due to high repair costs that are disproportionate to the premiums paid. The Federation maintains that the premium rates stay within the limits set out in the unified motor insurance policy.

He explains that insurance companies' reluctance and refusal to provide comprehensive insurance for vehicles owned by car rental companies or luxury vehicles is because their insurance premium ceiling is similar to that for other cars. The cap is the same despite the significant losses and costs associated with luxury cars and rental vehicles.

He added, "The prices at which insurance policies are currently sold are fair to all and are consistent with the degree of risk.” He also says that previously, motor premiums had been slashed due to competition and price-cutting that led to significant losses for motor insurers.