There are quite a few people in the world for whom owning a prestigious luxury car is the reward they want for the hours they have spent working. They have a passion for these cars which are indeed great in all aspects and are willing to shell out even a fair share of their hard-earned money to own one. The highways of UAE are indeed quite suitable to cruise through in these luxury vehicles and flaunt it too!
While you are consumed with the thought of owning the luxury vehicle you have been dreaming of, most often than not, you tend to forget about the insurance component. You need to buy insurance now and year after year. Therefore, it is important to consider if investing in such luxury vehicles after giving due consideration to the insurance component too. Procuring Car Insurance in UAE for vehicles that are categorized as luxury cars or the so-called high-end models could be as high as AED 300,000. Also, remember that it is an annual charge that would recur year after year as long as you own the vehicle.
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Contents
Factors that make prestige car insurance costlier
Types of insurance policies
When you are thinking of acquiring motor insurance for an ordinary/standard vehicle in UAE, there are actually two types of policies you can opt for
- Third party liability insurance
- Comprehensive insurance for cars
The third-party liability insurance refers to the amount that the insurer has to shell out towards the damage of vehicle of the third party, infrastructure damage if any as well as hospital bills in case of an injury. You, as well as your vehicle, would not be protected. It is the minimum cover policy that is mandatory in almost all countries. It is usually, the least expensive insurance you can buy for your vehicle. The comprehensive Insurance for cars, on the other hand, is a holistic package that covers almost all aspects that need to be covered including you and your vehicle in case of damage in an accident or even the loss of vehicle too.
The prestige or luxury cars are considered to be the most expensive set of vehicles as far as insurance is concerned. This is because in most of the cases it is recommended to buy a comprehensive coverage insurance in UAE considering how expensive the car is, its susceptibility as a target for theft, the high powered engine that may tempt the driver to drive at high speed which might result in accidents, the high costs involved in the replacement of each and every part of the vehicle in case of damage. This makes the insurance premium expensive for owners of luxury vehicles.
However, you can Compare Car Insurance Policies offered by different insurance providers to buy an insurance policy that could be adequate at reasonable premium costs. Similarly, while the comprehensive policy is recommended for the new model luxury cars that you are going to use often, you may consider third party liability cover alone too. That is if the luxury vehicle you purchased is an old model that is not likely to be used by you quite often and already is of a decreased value.
The type of luxury car
Even among the prestige or luxury cars, when you Compare Car insurance, you will note that there is the difference in the premium amount you would be paying for a luxury sports vehicle when compared to a luxury sedan. The terms used to separate or differentiate between these vehicles are HPV which means High- performance vehicle and a fine example for this is the Ferrari car or the Lamborghini. While the other category is termed HVV meaning High-Value Vehicles. Luxury cars like Bentley and Rolls Royce fall into this category. The premium for Insurance in UAE for HPV vehicle is generally believed to be 40% more than the premium of insuring HVV models.
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Cost of comprehensive cover insurance
The cost of comprehensive cover insurance as revealed by a new study states that it costs about AED 8,000 to AED 20,000 to insure a luxury model. In this, the convertible supercars seem to be the costliest when you Compare Car Insurance cost. To illustrate you might consider a Maserati Grancabrio. The average cost of insurance for it works out to AED 19,905. Now consider Ferrari California. The average cost of insurance is about AED 20,010. Alternatively, consider the cost of Insurance in UAE for Bentley which falls under the HVV category, you will find that the cost of comprehensive cover is between AED 8,500- AED 9,500. This varies depending on the model and is usually about 0.65%-0.87 % of the value of the car.
The new insurance rules in UAE
The new rules to be followed regarding Insurance in UAE are in effect from January 2017. When you Compare Car Insurance, you will notice that the new rules do impact the cost of the premium. It is especially high for prestige cars. The important aspects of the new rules that might impact Premium costs of Insurance in UAE include
- Coverage for family members of the owner/driver of the car in case of an accident as part of the coverage instead of it being an add-on feature.
- Increase in the minimum comprehensive cover for SUV’S that is set at AED 2,000. Previously, it was AED 1,050.
- An option for the insurance providers to set the insurance premiums at a value that is less than 7% the value of SUV and less than 5% in the case of a Sedan.
These new regulations laid down could also influence the premium costs of prestige or luxurious cars.
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Purchasing a prestige car insurance
When you are thinking of buying an insurance policy for a luxury car, you need to give importance to certain aspects. it includes
- Taking time to Compare Car Insurance policies offered by different insurance providers and the premiums to choose the right type of insurance for your vehicle.
- You must understand that your dream car is prone to repairs. Most of the times, the standard insurance policies would not give you the option to choose the garage you want to send the vehicle to get it repaired. Therefore, it is important for you to check if the insurance provider allows agency/dealership repair even if the car has to be transported elsewhere for repair when there is no agency to repair the car in UAE.
- It is important to ensure that your luxury car is not underinsured. You might be tempted to opt for the Insurance in UAE that comes with a low premium considering the huge sum you are about to spend in purchasing the car. But, you must understand that being underinsured might land you in trouble in case of an accident or a repair because the amount you would have to shell out of your pocket would indeed be more expensive than the amount you saved by purchasing insurance with low premium.
- The cost of the insurance premium for prestige/luxury cars would definitely be more than that required to insure standard cars. The reasons for this include factors such as the claim that you would be making in case of an accident or a repair for these prestige cars would be quite high, the cost of replacing damaged parts as well as the number of parts that are eligible for the claim are more.
- In terms of the weight and height of the vehicle, the damage that they might cause to the standard vehicle in an accident would be quite heavy. This means that the insurance provider has to pay more as compensation to the third party would be high, especially, if the fault rests on the driver of the luxury vehicle. This increases the premium amount that is charged in case of luxury vehicles for Insurance in UAE.
All said and done, and you must understand that you can still purchase insurance for luxury or prestige vehicles at a reasonable premium if you compare car insurance plans across various insurance providers.
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How to save money?
You stand a chance to save money in the form of reduced premium amount for luxury cars if you
- Install burglar alarms or other security devices that would ensure the safety and security of your car.
- Are willing to pay a higher excess. This will lower the premium costs of Insurance in UAE.
Second-hand luxury cars
You would be happy to notice that you can buy used luxury models at relatively lower prices. It owes to the car value drop that is about 20% in the first year and 15% each for every year after that. The percentage is likely to be higher across different models of prestige or luxury cars. The premium for used luxury cars is lower than that of the new vehicles.
You know that you need to ensure that the prestige car is covered adequately owing to the amount you need to expend to buy it. If you shop for insurance products backed by research, you can come across policies that can help you get the coverage you desire and that your prestige car deserves at a premium that is cost-effective.
