Top 5 Common Car Insurance Questions Answered

“Do I need agency repairs coverage?” “Can I drive a rental car with my policy?” If these car insurance questions sound familiar, you’re in good company. 

When comparing Car Insurance UAE plans, UAE drivers often have the same doubts. But here’s the good news: answering these common car insurance questions upfront can simplify your search, help you avoid overpaying, and ensure you’re prepared for everything from minor scratches to major collisions.

Ready to cut through the jargon? Let’s dive into the top 5 frequently asked questions and clear up any confusion.

1. Can I Drive Without Car Insurance in the UAE?

This is one of the most common Car Insurance Questions. Legally? No. Driving uninsured violates UAE law, even for short trips. The UAE’s Federal Traffic Law requires minimum third-party coverage to protect others in accidents.

Risks of Uninsured Driving

• Legal consequences: Fines, impoundment, and even deportation for expats.
• Financial liability: Paying out of pocket for third-party injuries or property damage.
• No accident forgiveness: Uninsured drivers face harsher penalties in court.

What Happens if You’re Caught Without Insurance?

• Immediate AED 500 fine + AED 200 “knowledge fee”
• Vehicle impoundment for 7 days (plus AED 1,000 release fee)
• License suspension for repeat offenders

But here’s the catch: Third-party insurance only covers others, not your car. Upgrade to comprehensive Car Insurance UAE for full protection.

2. How Do Car Insurance Premiums Work in the UAE?

To answer this question, first, you should know what factors Premiums are calculated based on. Which included:

• Your car’s value: Luxury or new cars cost more to insure.
• Driver profile: Age, driving history, and even nationality (some insurers adjust rates for expats).
• Coverage type: Comprehensive plans cost more than third-party.
• Risk assessment: Insurers weigh accident-prone areas (e.g., Sheikh Zayed Road vs. suburban roads). Also, your history as a driver can make you a low-risk driver or high-risk driver (based on your accident history and claim records)
• Optional add-ons: Agency repairs, off-road coverage, or rental car reimbursement.

Insurance companies calculate premiums based on these factors. If you want to know the exact fee before buying car insurance, we recommend using Lookinsure’s online quote.

Pro Tips To Pay Less On Car Insurance Premiums

1. Install a vehicle tracking device. Many UAE insurers offer discounts for GPS-enabled cars.
2. Ask about “multi-car discounts” if insuring multiple vehicles under one policy.
3. Bundle your car insurance with home or life policies for loyalty discounts.

3. What Does a Typical Comprehensive Car Insurance Policy Cover in the UAE?

Unlike third-party insurance, which only covers damage you cause to others, comprehensive Car Insurance UAE safeguards your own car against accidents, theft, natural disasters (like sandstorms or floods), and even vandalism. 

Standard Inclusions For UAE Comprehensive Car Insurance

• Accidents: Repairs for collisions, regardless of fault.
• Theft: Full reimbursement if your car is stolen (subject to police report).
• Natural disasters: Sandstorms, floods, or fire damage.
• Third-party liability: Covers injuries or property damage to others.

Common Exclusions For Comprehensive Car Insurance

• Wear and tear, mechanical failures, or intentional damage.
• Driving under the influence of alcohol/drugs.

4. How to File a Claim for Car Insurance in the UAE?

Filing a car insurance claim in the UAE can be stressful, but knowing the right steps can help ensure a smooth process. Start by staying calm, documenting the scene, and contacting your insurer immediately. Delays can lead to claim rejections. UAE law also requires involving the police in accidents that result in injuries, significant damage, or disputes. Here’s how to navigate the process efficiently:

1. Ensure Safety First: Move vehicles to a safe spot (if possible) and check for injuries.
2. Call the Police: dial 999 for emergencies or use the Dubai Police or Abu Dhabi Police app for minor accidents.
3. Document Everything:

• Take photos of the damage, license plates, and the accident location
• Collect the other driver’s insurance and contact details

4. Notify Your Insurer: Submit a claim via phone, email, or the insurer’s app (e.g., Oman Insurance, AXA UAE).
5. Submit Required Documents:

• Police report (mandatory for claims over AED 2,000)
• Driver’s license, vehicle registration, and insurance policy copy

6. Wait for Assessment: An insurer-appointed surveyor will inspect the vehicle.

Pro Tips for Car Insurance Claim Process in the UAE

• For minor accidents, use Dubai Police’s “My Accident Report” service to skip station visits.
• Keep a “claims kit” in your car: phone charger, insurer contact info, and a disposable camera (in case your phone dies).
• Don’t admit fault at the scene. Let the police and insurers determine liability.

5. Can I Transfer or Cancel My Car Insurance Policy in the UAE?

The answer to this lesser-known common car insurance questions is yes! Transferring or cancelling car insurance in the UAE is possible, but the process depends on your situation. Whether you’re selling your car, switching providers, or leaving the country, here’s what you need to know:

Transferring A Policy

• Required when selling your car
• Notify your insurer and provide the buyer’s details (name, Emirates ID, new registration).
• The new owner pays a transfer fee (AED 100–AED 300) to update the policy.

Cancelling A Policy

• Submit a written request to your insurer (email or app)
• Return the original insurance certificate and canceled vehicle registration
• Receive a pro-rated refund for unused months (minus admin fees)

Here’s an example of a refund payment after cancellation:

Imagine you want to cancel 6 months into a 12-month AED 2,400 policy, now the refund will be:

Refund = (AED 200/month × 6 months) – AED 150 admin fee = AED 1,050

Pro Tips for Car Insurance Cancelation or Transfer in the UAE

• Some providers charge a fee if canceled within the first month of renewal. This is called the 13-month rule. Be sure about it.
• If your car is financed, cancellation may require bank approval.
• Cancel your policy only after securing new coverage to avoid legal gaps!
• Cancelling mid-term may reset your discount history.
• Check for “cooling-off periods”—some UAE insurers allow free cancellation within 15 days of purchase.

More Car Insurance Questions UAE Drivers Ask

Here we answered some Car Insurance Questions which is popular among UAE drivers:

Does Insurance Cover Rental Cars?

Most Car Insurance UAE policies exclude rental vehicles unless you purchase a rental car extension or standalone coverage. Always check your policy terms. Some insurers like AXA UAE offer short-term add-ons for rentals. Credit card coverage may apply, but it’s rarely sufficient for the UAE’s liability requirements.

What If My Car Is Totaled In An Accident?

If your car is deemed a total loss (repair costs exceed ~75% of its value), insurers will pay the insured declared value (IDV) minus depreciation. UAE law requires a police report and insurer-approved inspection to confirm the total loss. Negotiate the IDV upfront to avoid disputes.

Are Modifications Covered Under My Policy?

Modifications (e.g., engine tweaks, custom paint) are typically excluded unless declared and approved by your insurer. Undisclosed changes can void your coverage. For UAE off-road enthusiasts, some providers offer modified car insurance as an add-on, but expect higher premiums.

Ask Your Common Car Insurance Questions

We answered the most common car insurance questions, covering:

• Legal Necessity: Third-party insurance is mandatory; uninsured driving incurs fines, impoundment, or license suspension.
• Risk-Based Premiums: Costs reflect car value, driver history, and coverage type—optimized via GPS trackers, multi-car discounts, or bundled policies.
• Comprehensive Protection: Covers accidents, theft, and natural disasters (excludes DUIs, wear and tear, or undeclared modifications).
• Streamlined Claims: Require police reports, photo evidence, and insurer coordination—avoid admitting fault to prevent disputes.
• Policy Flexibility: Transfer/cancel with prorated refunds (minus fees); ensure continuous coverage to avoid legal gaps.

Reading these answers would help you to know more about the rules of Car Insurance UAE before buying/renewing your policy. Still, if you don’t get your answer, you can comment on your question so our experts at Lookinsure can answer it.

Frequently Asked Common Car Insurance Questions