Car insurance premiums could rise as emergency fees imposed

ABU DHABI // The cost of car insurance premiums could rise as a result of the introduction of ambulance services fees. Starting on Sunday, fees will be charged to the insurance provider of the driver who causes an accident in Dubai resulting in an ambulance having to be called. Sheikh Hamdan bin Mohammed, Crown Prince […]

ABU DHABI // The cost of car insurance premiums could rise as a result of the introduction of ambulance services fees.

Starting on Sunday, fees will be charged to the insurance provider of the driver who causes an accident in Dubai resulting in an ambulance having to be called.

Sheikh Hamdan bin Mohammed, Crown Prince of Dubai and chairman of the Dubai Executive Council, on January 27 issued a resolution on fees for ambulance services provided at the sites of traffic accidents.

According to a statement issued by Dubai Media Office, a Dh6,770 fee will be charged by Dubai Police and Dubai Corporation for Ambulance Services, for emergency and evacuation services in a traffic accident.

Mustafa Vazayil, managing ­director of insurance brokerage company Gargash Insurance, said any increase in motor insurance premiums was unlikely to take effect immediately.

“We are expecting an increase on premium rates,” he said.

“However, I don’t think anybody in the industry will go and increase their premiums overnight.

“I don’t see it happening ­immediately, but you will definitely see the price going up ­after six months, by the third quarter of this year.”

The increase in insurance premiums will not be substantial, according to Mr Vazayil.

“I expect it to be in the region of 5 per cent to 10 per cent,” he said. “Nobody can increase ­ their premiums substantially because there are more than 50 insurance companies that will be competing in the market. Even if there is an increase, I think it will be minimal.”

From a consumer’s point of view, the increase constitutes additional expense.

“But 5 to 10 per cent is not going to break anybody’s bank,” Mr Vazayil said. “If you look at the average premium on a mid-size car, it would be about Dh2,000. A 5 per cent increase is going to be about Dh100.”

But Frederik Bisbjerg, executive vice president of Mena Retail at Qatar Insurance Company, did not see any reason to increase their car insurance premiums because of the ambulance costs.

“When they started talking about this, we looked at how we’re going to price our product,” he said. “We’ve already added the ambulance costs to our insurance premiums.

“It’s no secret that the market is not very healthy in the UAE. We did some calculations last year and figured out our pricing. We’re running a fairly healthy portfolio now, and we’ve already factored in the ambulance costs since last year.”

For Kamui Mahtani, 28, a motorsport enthusiast who has been working in Dubai for five years, a 5 per cent increase would be understandable.

“But anything more than that is too much and an opportunity for insurance companies to make more money,” he said.

By law, motorists have to take out a minimum of third-party liability coverage, which will cover damage of property, death or injury to a third party caused by a driver’s vehicle.

Vehicle owners should be aware of the insurance policy they bought and ensure they are getting the right insurance cover, Mr Vazayil said.

“Five per cent more or 5 per cent less – at the end of the day you are buying a promise to repair your car or to meet your liabilities in case of an accident,” he said. “Your policy should be good enough to cover all your needs. The cost shouldn’t be the main criteria when selecting the right policy.”

rruiz@thenational.ae

Source: uae news

Leave a Reply

Your email address will not be published. Required fields are marked *