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Car Insurance - The Ultimate UAE Driver's Guide (60 FAQs)

Last updated on : 17 Nov 2025
10 min read

The Basics & Mandatory Requirements

  1. What is car insurance?

    It's a contract where you pay a premium to an insurer who agrees to cover the financial costs associated with car accidents, theft, or damage, as specified in your policy.

  2. Is car insurance legally required in the UAE?

    Yes, absolutely. It is illegal to register or drive a car without at least a valid Third-Party Liability insurance policy.

  3. What happens if I'm caught driving without insurance?

    You face severe penalties, including a 500 AED fine, 4 black points on your license, and vehicle impoundment for 7 days. Your car cannot pass its annual registration test without valid insurance.

  4. What are the two main types of car insurance?

    Comprehensive and Third-Party Liability (TPL).

  5. What is Third-Party Liability (TPL) Insurance?

    This is the minimum legal requirement. It covers injury or death to another person and damage to their property/vehicle that you are legally liable for. It does not cover any damage to your own car.

  6. What is Comprehensive Insurance?

    It includes all the coverage of TPL, plus it covers loss or damage to your own car due to accident, fire, or theft, regardless of who is at fault.

  7. Who should buy TPL?

    Owners of older cars (typically 7+ years old) where the cost of comprehensive cover might be close to or exceed the car's value.

  8. Who should buy Comprehensive?

    Owners of new or valuable cars, cars under bank finance, or anyone who wants complete peace of mind and protection for their own asset.

  9. What is a 'Policy Schedule'?

    This is the most important part of your policy document. It summarizes your specific coverage, your car's details, the insured value, the premium, and the deductible.

  10. How long is a standard car insurance policy valid for?

    13 months. This includes a 12-month coverage period and a 1-month grace period to align with the RTA's vehicle registration cycle.

  11. What are the most common policy exclusions?

    Driving without a valid UAE license, driving under the influence of alcohol/drugs, intentional damage, racing, and using your private car for commercial purposes (e.g., as a taxi).

  12. What if a friend drives my car and has an accident?

    If they hold a valid UAE license and you gave them permission, your comprehensive policy should cover the damage. However, the insurer might apply a higher deductible.

  13. What is GCC cover?

    This extends your TPL coverage to other GCC countries. You would still need to buy separate comprehensive cover for your own car's damage at the border.

  14. Are modified cars insurable?

    Yes, but you MUST declare all modifications to the insurer. Failure to do so can void your policy. Expect a higher premium for performance modifications.

  15. Can I insure an imported car (e.g., from the US or Japan)?

    Yes, but not all insurers will cover them, and premiums are often higher due to different specifications and parts availability.

Understanding Your Coverage, Add-ons & Exclusions

  1. What is 'Agency Repair'?

    Your car will be repaired at the manufacturer's official dealership. This is usually available for cars up to 3 years old (sometimes extendable to 5) and ensures original parts are used.

  2. What is 'Garage Repair' or 'Network Garage Repair'?

    Your car will be repaired at a high-quality garage that is part of your insurer's approved network. This is the standard for older cars and is more affordable than agency repair.

  3. What is Roadside Assistance?

    An essential add-on that provides 24/7 help for flat tires, dead batteries, running out of fuel, mechanical breakdowns, and towing your vehicle to a garage.

  4. What is Personal Accident (PA) Cover for the Driver?

    This provides compensation (up to a set limit, often 200,000 AED) in case of the driver's death or permanent disability resulting from an accident.

  5. Do I need PA Cover for Passengers?

    It's highly recommended. This extends the personal accident benefit to passengers in your vehicle.

  6. Does my insurance cover me in Oman?

    Only if you have an 'Oman Extension' or 'Oman Cover' add-on. Standard policies only cover the geographical territory of the UAE.

  7. What is 'Loss of Use' or 'Rental Car' cover?

    This add-on provides you with a replacement hire car or a daily cash allowance while your car is being repaired following a claim.

  8. What about natural disasters like floods or sandstorms?

    Comprehensive policies in the UAE typically cover damage from natural calamities like rain, floods, storms, and hailstorms. TPL does not.

  9. What is 'Off-road Cover'?

    A specific add-on for 4x4 vehicles that extends your comprehensive cover to incidents that occur during off-road activities like dune bashing. Standard policies exclude this.

Premiums, Costs & Discounts

  1. How is my premium calculated?

    Insurers use many factors: driver's age, driving experience, claims history (NCD), car's make, model, age, and value, chosen car insurance coverage type (Comp/TPL), and selected add-ons.

  2. What is the 'Deductible' or 'Excess'?

    The fixed amount you must pay from your own pocket for any claim where you are at fault. For example, if your deductible is 500 AED and the repair cost is 5,000 AED, you pay 500 AED and the insurer pays 4,500 AED.

  3. Can I choose my deductible amount?

    Sometimes. Choosing a higher deductible can lower your annual premium, but it means you'll pay more in the event of a claim.

  4. What is a No Claims Discount (NCD) or No Claims Bonus (NCB)?

    A significant discount on your premium for every year you go without making a claim. It's a reward for safe driving.

  5. How much can I save with an NCD?

    It can be substantial, often reaching up to 50% or more after 5+ claim-free years.

  6. Can I transfer my NCD from my home country?

    Some insurers may accept an official letter from your previous insurer abroad as proof of your claim-free history, but it's not guaranteed. It's always worth asking.

  7. How do I prove my UAE NCD when switching insurers?

    Your current insurer can provide a "No Claims Certificate." Platforms like Shory can often verify this automatically.

  8. Will my premium increase if I make a claim?

    Yes, you will likely lose your NCD at the next renewal, leading to a higher premium.

  9. Does a windscreen chip claim affect my NCD?

    Many comprehensive policies offer a free windscreen repair/replacement benefit that does not affect your NCD. Check your policy wording.

  10. Why is insurance more expensive for young/new drivers?

    Statistically, drivers under 25 or with less than one year of experience are at a higher risk of having accidents, so premiums are higher.

  11. Why does a sports car cost more to insure than a sedan?

    Because of its higher value, higher repair costs, and higher statistical risk of being involved in high-speed accidents or theft.

  12. Can I pay my premium in installments?

    Yes, many digital platforms like Shory partner with services like Tabby to allow you to pay your annual premium in interest-free monthly installments using a credit card.

Claims & Accidents

  1. What is the absolute first thing to do after an accident?

    Ensure everyone is safe. Then, move your vehicle to the shoulder if it's a minor accident to avoid blocking traffic. Immediately call the police (999).

  2. Why is a police report so important?

    It is a mandatory document for any insurance claim in the UAE. Garages will not begin repairs without a valid police report.

  3. How do I get a police report for a minor accident in Dubai?

    You can use the Dubai Police app to report minor accidents without injuries, saving you time.

  4. What if the other driver is at fault? Do I still pay a deductible?

    No. If the police report clearly states the other party is 100% at fault, you do not have to pay a deductible for your repairs. You will receive a "green slip" from the police.

  5. What if I am at fault?

    You will receive a "red slip" from the police. You must then file a claim with your insurer and pay your policy's deductible.

  6. What if the other driver flees the scene (hit-and-run)?

    File a police report immediately. Your comprehensive car insurance policy will cover the damage, but you will likely have to pay the deductible as the at-fault party is unknown.

  7. How do I start the claim process?

    Contact your insurer's claim hotline as soon as you have the police report. They will guide you on the next steps and direct you to an approved garage.

  8. What is a "Total Loss"?

    When the cost to repair your car is more than 50-75% of its insured value, the insurer may declare it a total loss.

  9. What happens if my car is declared a total loss?

    The insurer will pay you the car's "insured value" as stated in your policy, minus the deductible. The policy is then terminated. You will not get the car back (it goes to the insurer for salvage).

  10. What is "Depreciation"?

    When repairing an older car, insurers may ask you to pay a percentage of the cost of new parts, as they are replacing old parts with brand new ones, thereby increasing the car's value.

  11. How long does the repair process usually take?

    This depends on the extent of the damage and parts availability. It can range from a few days for minor repairs to several weeks for major ones.

Renewals, Cancellation & Other Scenarios

  1. When should I start looking for my car insurance renewal?

    Start comparing quotes on a platform like Shory 3-4 weeks before your current policy expires. This gives you ample time to find the best deal without rushing.

  2. Should I just auto-renew with my current insurer?

    It's rarely the best option. Insurers' prices change annually, and a competitor may offer the same or better coverage for a lower price. Always compare.

  3. Can I cancel my policy if I sell my car?

    Yes. You can cancel the policy and receive a pro-rata (proportional) refund for the unused period, minus a small administration fee.

  4. What happens to my insurance if my registration (Mulkiya) expires?

    Your insurance remains valid for the full 13-month period, but it's illegal to drive with an expired registration. Renew your registration as soon as possible.

  5. I have a bank loan on my car. Are there special insurance requirements?

    Yes, the bank will mandate that you have a comprehensive policy to protect their financial interest in the vehicle. They may also insist on agency repair for a certain period.

  6. Can I insure a car that is not registered in my name?

    This is difficult. The policyholder and the registered owner of the car must typically be the same person.

  7. Does my gender affect my car insurance premium?

    Unlike in some other countries, gender is not a primary rating factor in the UAE. Age and driving experience are far more important.

  8. What is an "Unnamed Driver" policy?

    This is a misconception in the UAE. All policies are issued to a primary named driver. Other drivers are covered (if licensed), but the policy is tied to the main policyholder.

  9. My car failed the RTA test. Will insurance cover the required repairs?

    No. Insurance covers damage from sudden and unforeseen events (accidents, etc.), not mechanical failure or wear and tear discovered during an inspection.

  10. What is 'subrogation'?

    It's the legal right of your insurer to recover the claim amount from the at-fault party's insurer after they have paid for your repairs. You don't need to do anything; the insurers handle this between themselves.

  11. Can I get a discount for having multiple policies (e.g., car and home) with the same insurer?

    Some insurers offer a "multi-policy discount," but it's not a standard practice. It's often better to find the best individual deal for each policy.

  12. Why use Shory for car insurance?

    Shory allows you to instantly compare official car insurance quotes from UAE's top insurers in one place. You can filter by price, benefits like agency repair, and add-ons, and buy your policy online in under 3 minutes, receiving the documents instantly. It saves you time, money, and hassle.
Disclaimer: Shory aims to present accurate and up to date information, however we take no responsibility or liability for any errors or omissions in the content

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