Insurers in UAE hiking premia for 'crash' cars, claim motorists

Motorists are complaining that insurance companies in the UAE are demanding higher premiums while renewing policies for accident-affected cars, according to a report in the Arabic daily newspaper Emarat Al Youm.

Managers in the insurance industry said that they are seeking higher premiums so that motorists bear part of the cost of the accident caused by them and to encourage them to be more careful in future.

Motorists said some insurers are refusing to renew policies in case of a major loss because of an accident.

Ahmed Al Masry, sales representative, said he was surprised when his insurance company raised its premium from Dh200 to Dh300 while renewing his car’s policy.

He said insurance companies often do not bear losses up to the insured amount and resort to various ways to raise premiums, especially after accidents.

Samer Al Siba’ai said he, too, was surprised when his insurer raised premium from Dh200 to Dh250. When the company refused to renew the policy without raising the premium, he moved to another insurer.

Mohanad Al Ibrahim said insurers sometimes charge motorists part of the cost of spare parts needed to repair the accident-affected car.

Adnan Elias, sales manager at Fidelity Insurance Company, said some insurers raise premiums when renewing policies of accident-affected cars. Some refuse to renew the policy if the loss caused by accident is substantial.

Elias said, “Insurance companies seek to protect themselves when they suffer successive losses from repeat accidents in which the insured car is involved.

He said insurance premiums had declined in recent years due to competition which can be seen in the financial results of insurance companies.

He added that although vehicle insurance premiums had risen recently, it is still low compared to the risks covered.

George J. Kabban, CEO of United Insurance Brokers (Dubai), said motorists could change their insurer if it raises the premium during settlement of accident-related claims.

He stressed the importance of insurance companies notifying customers if they want to raise the premium. The customer must read the terms of the policy carefully and get all doubts clarified before signing the agreement.

Bassam Chilmeran of Al Wathba National Insurance Company, said insurers are complying with the limits on premiums imposed by the UAE Insurance Authority while issuing car policies.

But Chilmeran said these premiums need to be reviewed because they were fixed a long time ago and to take into account the rise in insurers’ costs like vehicle maintenance charges of workshops.

The UAE Insurance Authority told the newspaper that the first amount paid by the owner of the vehicle depends on the accident but the insurance company has no right to charge more than specified amounts.

The authority indicated the owner of the vehicle need not pay anything if the accident was not the result of his mistake.

Follow Emirates 24|7 on Google News.