UAE Car Insurance: The Mistakes That Cost Drivers the Most and How to Avoid Them

Car insurance in the UAE looks simple on the surface. You choose a policy, pay the premium, and assume you’re protected.
In reality, most problems happen after an accident, when drivers discover that what they believed was covered… isn’t.

This guide focuses on the most common and expensive mistakes UAE drivers make with car insurance, based on real rules, not sales promises.

*** Assuming “Comprehensive Insurance” Covers Everything ***

This is the most common and costly misunderstanding.

Comprehensive insurance does not mean “all situations are covered.” Many drivers only discover this after a rejected claim.

Common exclusions include:

- Damage caused while the car is driven by an unlisted driver
- Accidents caused while the driver is under the influence
- Damage from floods or natural events if not explicitly included
- Using the car for commercial purposes when insured for personal use

Always check the policy exclusions, not just the coverage summary.

Official reference:
https://u.ae/en/information-and-services/transportation/vehicle-insurance



*** Choosing the Cheapest Policy Without Checking Claim Conditions ***

Low-priced policies often come with:

- Higher deductibles (you pay more out of pocket)
- Limited garage networks
- Long approval times for repairs
- Strict documentation requirements

Drivers save money upfront, then lose weeks of time and thousands of dirhams later.

Insurance cost should be evaluated based on:

- Claim approval process
- Repair network quality
- Customer complaint history

Regulatory authority:
https://www.centralbank.ae/en/our-operations/insurance



*** Not Reporting Minor Accidents to the Police ***

In the UAE, a police report is required for almost all insurance claims, even for small scratches.

Many drivers agree to “settle privately” to avoid fines or inconvenience.
Later, when hidden damage appears, insurance will refuse the claim completely.

Even minor incidents should be reported through:

- Dubai Police app
- Abu Dhabi Police app

Official sources:
https://www.dubaipolice.gov.ae
https://www.adpolice.gov.ae

*** Forgetting to Update Driver Details on the Policy ***

Insurance is tied to who drives the car, not just the car itself.

Claims are often rejected because:

- A family member or friend was driving
- A new driver was not added to the policy
- Age or license history did not match policy conditions

Always update your insurer when:

- A new driver uses the car regularly
- A driver’s license status changes

*** Overlooking Car Value Depreciation at Renewal ***

Each year, insurers reduce the insured value of the car. Many drivers renew automatically without checking.

This means:

- You pay premiums based on outdated assumptions
- Your payout after total loss may be far lower than expected

Before renewing, always confirm:

- Current insured car value
- Whether depreciation matches market reality

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*** Assuming Insurance Covers Traffic Fines and Black Points ***

Insurance never covers:

- Traffic fines
- Black points
- Vehicle confiscation penalties

Some drivers assume “full coverage” includes legal penalties. It does not.

Traffic rules and fines are handled separately by authorities such as RTA and police departments.

Reference:
https://www.rta.ae

https://u.ae/en/information-and-services/justice-safety-and-the-law