🚗 UAE Car Insurance: Third-Party vs Comprehensive, Excess Caps and Write-Offs

Car insurance is the one policy almost every UAE driver has, because the car cannot be registered or renewed without it. But "car insurance" in the UAE is really two things: a compulsory third-party policy and an optional cover for your own car. This guide explains the split, what the rules say about excess and write-offs, and what a claim looks like in numbers.

The Two Parts

• Third-party liability (compulsory): pays for bodily injury and property damage you cause to other people while using or parking the vehicle in the UAE. It does not repair your own car. The policy form is set by the regulator (Insurance Authority Board Decision No. 25 of 2016, as amended), which the Central Bank now publishes in its rulebook.
• Loss or damage cover (optional): pays for your own car if it is damaged or written off. This is what people usually mean by "comprehensive". You can add it to the compulsory policy or leave it out.

A Gulf News report on the 2018 approval of the unified policy gave the third-party property damage limit as AED 2 million, up from AED 250,000. I could not check this against the Central Bank text, which was blocked from direct fetch, so look at the limit printed on your own policy schedule.

How Premiums Are Set

The Insurance Authority set a schedule of minimum and maximum premiums from 1 January 2017, replacing a circular that had applied since 1996. Insurers can compete inside the range but cannot add charges the regulator has not approved. Reporting at the time said the maximum rate for the loss or damage policy on a sedan stayed at 5% of the car's value. Your actual premium depends on the car, your age and driving record, and the insurer, so treat any rate you read online as a guide.

Excess (Deductible) Caps

The excess is the amount you pay on a claim. The rules cap the extra excess an insurer can charge on the loss or damage cover, as a share of the compensation:

• Drivers under 25: up to 10%
• Public vehicles and taxis: up to 15%
• Sports and modified vehicles: up to 20%

These figures come from Gulf News reports of the 2016 schedule and the 2018 policy approval. Your policy may also have a fixed excess, so read the schedule.

Repair or Write-Off

The same 2018 report said an insurer must repair the car, or pay its market value if the repair would cost more than 50% of that value. Whether a car is repaired at the dealer's workshop or a non-agency garage is a feature you choose and pay for, so check which your policy gives you.

Worked Examples

All figures are illustrations with an assumed car and rate, not quotes.

• Premium: 2.5% of a AED 60,000 car is AED 1,500 a year. At the 5% sedan maximum it would be AED 3,000.
• Under-25 excess: on a AED 12,000 repair, a 10% extra excess is at most AED 1,200, on top of any fixed excess in the policy.
• Write-off: if the car is worth AED 60,000 and repair would cost AED 35,000 (more than half), the insurer treats it as a total loss and pays about the market value, less your excess.
• Someone else's car: if you hit another car, the third-party part pays for their repair. Without own-car cover, your repair comes out of your pocket.

Insurance, Registration and Fines

You need valid insurance to register or renew a vehicle. Driving with expired registration has been reported to carry a fine of AED 500, four black points and seven days of impoundment, citing the Road Traffic Law. That figure is from older press reports, so check the current penalty with your police authority. Insurers may also limit what they pay on a car whose registration has expired, and some give a short grace period after the policy ends. Do not rely on the grace period: renew before the date.

Checklist Before You Renew

• Check whether you are buying third-party only or third-party plus own-car cover.
• Read the excess, any extra excess for age or modification, and the agency or non-agency repair choice.
• Ask whether a replacement car or personal accident cover is included. These are often optional extras.
• Declare modifications and the correct use of the car.
• Photograph the car and keep your policy, registration and licence copies handy for a claim.

Sources and last review

The two-policy structure was checked against the Central Bank rulebook's description of the unified motor policy (Decision No. 25 of 2016, as amended). Excess caps, the 5% sedan maximum and the repair threshold come from Gulf News reports of the 2016 schedule and the 2018 approval. Fine and registration points are from older press reports. Rulebook pages could not be opened directly when this article was prepared. Last reviewed on 24 October 2026. Confirm against your policy and the current rulebook.

• CBUAE Rulebook: Unified Motor Vehicle Insurance Policy Against Third Party Liability
• Gulf News: Unified system for motor insurance approved
• Gulf News: Insurance Authority issues schedule of premiums
• UAE Government Portal: Insurance

This article gives general information, not legal, financial or insurance advice. Rates are illustrations, not quotes. Read your policy wording and ask the insurer for a written quotation.