UAE – Amending the Motor Vehicle Insurance Regulations
- The Insurance Authority approved granting insurance discounts up to 50% of the insurance premium for frontlines workers.
- Discounts include workers in the healthcare sector, Armed Forces, Police, Civil Defence, the elderly, people of determination and drivers who have accident-free records.
- Al Mansoori: Insurance discounts aim at relieving the burdens on the insured and some segments of the society.
- The Insurance Authority decided granting partial refund of the insurance premiums for the valid motor vehicle insurance policies or reducing the insurance premium from the minimum when renewing the insurance policy in proportion to the period of the sterilization.
- The possibility of linking the premium of the new or renewed policies with the number of Kilometers driven by the motor vehicle based on the insured request.
Based on the vision and follow-up of the wise leadership and the directives of the Cabinet to support members of the First Line of Defence (frontlines) and mitigate the burdens on citizens and residents ,as well as supporting the insurance sector amid the current exceptional conditions, the Board of Directors of the Insurance Authority decided to amend the tariff rates of motor vehicle insurance so that companies have the power to deduct from the minimum insurance premium by up to (50%) for vehicles owned by individual working in the first line of defence ,such as ; workers in the healthcare sector, members of the armed forces, Police and Civil Defence, people of determination ,the elderly, and insurance applicants (individuals), who have accident-free records.
The amendments included that the company will have the competence to refund part of the insurance premiums for the valid motor vehicle insurance policies or reduce the insurance premium from the minimum when renewing the insurance policy, taking into account that The refund or reduced amount should be in proportion to the periods of sterilization period issued by the competent authorities.
The decisions included that the company will have the competence to calculate premiums of new or renewed policies by linking the premium with the number of Kilometers driven by the motor vehicle based on the insured request, provided that the premium will not exceed the maximum insurance premium specified in the tariff rates of motor vehicle insurance defined by the IA with the possibility of reducing it from the minimum.
H.E. Eng. Sultan bin Saeed Al Mansoori, Minister of Economy and Chairman of the Insurance Authority said that these decisions come within the package of measures taken by the IA to relieve the burdens on the insured and some segments of the society that are affected by the repercussions of the novel Coronavirus pandemic “COVID-19”. This includes the frontline workers, such as doctors, nurses and healthcare workers, as well as, members of the Armed Forces, Police and Civil Defence. In addition to the categories of people of determination, the elderly and insurance applicants (individuals), who have accident-free records.
H.E. added that the decisions represented an appreciation from the Insurance Authority in recognition for the role played by the workers of healthcare sector, Police, Civil Defence, and Armed Forces and the great efforts exerted by the workers in these sectors to protect lives and properties. In addition to taking into account the conditions of the categories of people of determination, the elderly, and drivers who have accident-free records.
H.E. stressed the importance of the activation of discounts on the minimum insurance premium by insurance companies, where applicable built on the participatory role played by the insurance sector by providing the insured protection against risks.
Particularly, amid the general sterilization decisions announced by the competent authorities. These procedures reduce the use of motor vehicles, which consequently reduce accidents and costs for insurance companies.
Furthermore, H.E., Minister of Economy, Chairman of the Board of Directors highlighted the importance of protecting the rights of policyholders and the insured to cope with the impacts of the implications of the novel Coronavirus on the insurance sector and the protection of the insurance parties and the provision of insurance coverage and appropriate services to the public at this stage, which will reflect positively on the future relationship between the insured the insurers. Eventually, this will contribute to strengthening the role of the insurance sector in protecting and maintaining the rights of insured.
According to the amendments approved by the Board of Directors of the Insurance Authority on Resolution No. (30) of 2016 and the amendments thereof, concerning the motor vehicle insurance tariff rates, insurance companies have the power to reduce from the minimum insurance premium by up to (50%) for vehicles owned by the following categories : (workers in the healthcare sector, members of the armed forces, Police and Civil Defence, people of determination and the elderly above 60 years old, and insurance applicants (individuals), who have accident-free records).
Furthermore, the amendments included that the company will have the competence to refund part of the insurance premiums for the valid motor vehicle insurance policies or reduce the insurance premium from the minimum when renewing the insurance policy, taking into account that owners of the motor vehicle are not using them in implementation of the decisions related to the sterilization program. The refund or reduced amount should be in proportion to the 24-hour-a-day sterilization period (Curfew) such as in the Emirate of Dubai, or partial period with specific number of hours per day (10) hours as determined in other emirates of the State.
The decisions included that the company will have the competence to change the calculation of premiums of new or renewed policies by linking the premium with the number of Kilometres driven by the motor vehicle or as per the insured wish, provided that the premium will not exceed the maximum insurance premium specified in the defined tariff rates of motor vehicle insurance, with the possibility of reducing it from the minimum.
This development comes within the framework of the Authority ‘s keenness to stimulate innovation and drive companies towards the launch of innovative insurance products, including the Pay-Per-Kilometer insurance product, which is known globally as “Pay as you go”. This will meet the requirements of drivers who do not travel long distances and look forward to paying insurance premiums corresponding to their actual needs.
The Insurance Authority confirmed that the application of this product will not amend or cancel both types of motor vehicles policies (against Third Party Liability or against Loss & Damage), which are issued pursuant to the Unified Motor Vehicle Insurance Policies Regulations. The IA pointed out that starting the application of such products is more convenient, especially in light of reducing the use of motor vehicles during the sterilization period.
In the same context, the IA confirmed that in order to cope with the new procedures followed by the Ministry of Interior to renew the vehicle license without inspection, it is importance for companies to comply with renewing the vehicle insurance policies without requesting a technical inspection for the vehicle and without the right to reject coverage. Further, companies should take into consideration the current circumstances with respect to the periods specified for reporting accidents and the sterilization announced by the official competent authorities.
