🚘 Car insurance in the UAE: How to get the best deal in 2025

Kacper Duda
Jul 30
4 min read

UAE car owners have seen car insurance premiums jump 30–40% year-on-year. It’s the result of a perfect storm: rising repair costs, stricter pricing regulations, a spike in fraudulent claims and macro shocks like last year’s floods.

It is therefore even more important to make sure you get the best deal possible on your car insurance - whether for a new purchase or renewal of an existing policy. Read on to find out:

What factors impact your insurance premiums
How to get the best deal on your car insurance
Common mistakes to avoid
In the news: (Slowly…) say goodbye to OTPs via email and SMS

Group of people taking selfie in open roof SUV.

How choosing wisely can save you AED 1000s on your insurance

We’ve run a comparison across three different cars to illustrate how your choices directly impact the amount you pay. Within each type of cover, prices easily fluctuate by 50-90% so if you’re not careful, you can end up paying almost double!

For our analysis, we used 2022 car models in basic configurations, and a driver in their mid-30s with two years’ UAE driving experience. All prices are quoted exclusive of VAT.

Car	Car category	Third-party only	Comprehensive (non-agency)	Comprehensive (agency repairs)
Nissan Sunny	Budget	AED 600-1300	AED 1450-2002	AED 2520
Honda CR-V	Mid-range	AED 790-1365	AED 1800-2652	AED 4376
Nissan Patrol	Premium	AED 830-1050	AED 2474-3086	AED 8976

Each policy may be slightly different and vary in excess amounts, recovery, repair garages and the level of regional cover for other countries. That’s why you need to read the fine print before taking out insurance to fully understand what you’re getting.

Comprehensive vs. 3rd-party insurance

This is the first choice you need to make when deciding on what insurance is best for you.

Third-party insurance is the legal minimum required to drive in the UAE. It’s cheaper, but only covers damage you cause to other people’s vehicles or property, not your own. If you’re at fault in an accident, you’ll be footing the bill for repairs to your car.
Comprehensive insurance, on the other hand, includes third-party cover but also protects your own vehicle - whether the accident was your fault or not. It costs more, but makes sense if your car holds significant value or you want broader peace of mind.

Agency vs. Non-Agency Repairs

This next choice on your policy determines where your car gets fixed after an accident.

Agency repairs mean your vehicle will be repaired by the manufacturer’s authorised service centre, using original parts. It’s the gold standard for quality, but comes at a cost — policies with agency repairs can be nearly twice as expensive, and repair times may be longer.
Non-agency repairs are done at garages approved by your insurer. These workshops may use non-original parts, though they should meet equivalent standards. Always ask for the insurer’s approved garage list to get a sense of quality before choosing this option.

What factors influence your premiums?

Your premiums are determined by your insurer based on the risk profile you and your car represent. Each insurer will use their own models to assess risk and price the policy, but they will usually involve a combination of:

Your car:

Car value and age - These are key determinants. The more expensive the car, the more expensive it usually is to repair and the higher the premiums. Currently, annual insurance premiums average out at 2.5% of the car’s value.
Car type - Sports and performance cars tend to attract higher premiums due to their speed capabilities. Premiums can also be higher for cars that are historically less reliable or more expensive to repair.

You, the driver:

Driving record - Your driving history, fines, black points and experience all paint a picture of what type of driver you are. Accidents and fines will all play against you when it comes to premiums.
Driver age - Statistics show that older drivers are more responsible, have more experience and fewer accidents. Therefore, premiums often reduce with age (up to a certain limit of course).
Residential location - High traffic areas and emirates increase the chance of accidents, hence driving premiums up.

🚩 Common mistakes to avoid

There are a few things you should avoid at all costs when buying car insurance:

Letting your insurance auto-renew without comparing quotes
Accepting the dealership’s insurance without question - you usually end up paying more.
Not re-evaluating your insurance needs - do you really need agency repairs when your car is 5 years old?
Failing to compare policies - this is where most people lose money!

How to get the cheapest car insurance in the UAE?

It always pays to shop around. You’ll typically have three options when buying car insurance in the UAE:

Through the dealership - convenient, but often overpriced.
Via comparison websites like InsuranceMarket.ae or Policy Bazaar – a good way to scan multiple offers quickly.
Using an independent broker - can help you tailor a policy to your needs, especially for non-standard cases.

We strongly recommend not accepting the dealership’s offer on the spot. It’s common to find the exact same policy cheaper elsewhere.

IN THE NEWS: (Slowly…) say goodbye to OTPs via email and SMS.

OTPs sent via text or email are not the most secure idea on earth. The concept lacks authentication of the receiver as the intended recipient. Luckily, things are about to change.

As per new guidance issued by the UAE Central Bank, banks will have to start phasing out email/SMS OTPs and transition customers to app-based OTPs. With this new approach, you will have to log into your banking app to confirm the transaction either via a code or a button click.

Don’t worry though, it’s not going to happen overnight. Banks (currently) have until March 2026 to fully implement the change, so you can start to expect changes from early next year. Read more about the change in this Gulf News article.

Disclaimer: Please bear in mind that this email does not constitute financial advice. Any choices you make you are solely responsible for. We always aim to provide highest quality, independent views but do your own research to ensure you’re comfortable with any changes you make to your personal finances.