A third party liability insurance is mandatory by law in UAE that provides the basic auto insurance covering the legal liability of the third party in the instance of the accident which is at your fault. So when people buy a car, typically they need to purchase car insurance as well.
Apparently, people often forget that auto insurance policies are contracts. In addition to paying the insurance premiums periodically, you need to adhere to their norms and conditions. However, there are simple mistakes that can increase your auto insurance premium or leave you responsible for bearing all the cost for the unforeseen accidents.
But how would you know that you are following the policies? Let us see some of the common scenarios that the policyholder generally miss and get into unnecessary challenges thereby losing their rights to claim for their damages during the occurrence of accidents.
10 Surprising scenarios that can be damaging to your car insurance
1 – Failing to add your licensed children to your auto insurance policy
Car insurance is an expensive affair, it consumes almost partially, approximately 1/8th part of your family budget, perhaps a burden to most individuals. So the policyholders often fail to include their licensed teen when it comes to the car insurance UAE.
With limited experience behind the wheels, your teen could pose a greater threat to the vehicle and to the third party. When you add more risk to your policy, you are likely to pay higher premiums. However, not willing to spend more on insurance, policyholders in many instances doesn’t include the teens to their existing policy.
Apparently, the insurance premium cost is calculated based on the number of households using the vehicle. Withholding information results in the difference of premium payments and this is not totally agreeable for the car insurance UAE. So while you buy insurance online, it is rather important to include all the households whoever using the vehicle including your licensed teen.
There are plenty of ways the insurance companies find the hidden licensed household members. They can pull out the data based on their usage. When they find out the information without we revealing it, this will result in the increased insurance premiums or sometimes leading to the termination of your policy as well which is even worse.
2. Changing your locations and not updating with the insurance companies
Relocations and house shifting is a common aspect that many of the individuals do in their lifetime. Buying a house and moving to a new location is not offensive. However, it is your immense responsibility to make your car insurance UAE aware of your new location.
Location is one of the primary aspects in determining the car insurance quote. The rates differ based on the area you live and the location you drive. If you live in a metro or make frequent drives, obviously you tend to pay higher premiums whereas people living in the urban tend to pay minimal premiums. While you buy insurance online, you might have resided in urban and would have been paying lesser premiums however after relocation, your current location may fall under metro, and then typically you should be paying higher premiums.
So, when there is a change or relocation of your resident address, you need to inform your insurance company about your current location.
3. Stilling holding the insurance for the car sold to your son or daughter
When you are no longer the owner of the car, there is no point in continuing the car insurance for the vehicle for whom your son or daughter is the current owner. Although they are minors, still they should be the policyholders of their car although buying insurance online for the minors is going to be a pretty expensive affair.
Statistical data explain the higher premiums that come with the teenage auto insurance premiums. According to the research, a greater number of accidents resulting in saddening deaths and bodily injuries are caused by teen drivers who have a lesser number of years of experience.
To avoid paying higher car insurance UAE premiums, the older owners (typically the dad) carries out the policy under his name though it is not driven by him anymore. You could face problems if your insurance company figure out about the owner change resulting in the denial of claims in cases of accidents and even for the cancellation of policies in the worst cases.
4. Financing and insuring a car for your friend or relative living in a different region is not acceptable
In some instances, you wish to finance and insure for your friend or relative living in a different state. However, this is not agreeable for the insurance companies. It would be rather a different situation of the auto insurance companies to determine the insurance premiums based on your data.
However, there are chances to accept your plea, if there are no insurance companies in that region. On the contrary, if a company exists in that state, this is against the company norms.
There are instances where this situation occurs and the policyholder finances for individuals living in the different region. When the insurance company figures it out, they would certainly nullify the policy.
5 – Lending your car without the knowledge of the insurance company
During necessary circumstances or in the case of emergencies, you might lend your car to your friend or neighbor. Although this is not the right thing to do, yet it is agreeable to some extent. However, when you have intentions to trade your car to someone for a long time, say about a couple of month for a vacation, it is the utmost responsibility of the policyholder to inform the insurance company about this. In addition, you cannot lend your auto on a regular basis without naming him/her on your insurance policy.
Failing to do this is against the policies and norms of car insurance UAE companies because, in the case of accidents, the insurance companies follow with the policyholder and not the driver. When the insurance company figures out that the car was driven by someone, you cannot get your claims irrespective of the best policies you have with the company and might result in the termination of the policies also.
6. Carrying the title and insurance for the auto, you have already sold
Virtually every insurance company in business advise and inform the policyholder to provide a written statement about the cancellation of the policy after you no longer own the auto. Lacking to carry out this important aspect will put you in a lot of hassle when the new owner makes an accident to your car. You would be held liable for their mistakes, and the insurance company is going to sue you for the damages caused by someone. To ensure that you cancel your policy as well as claim a refund for the unused part of your premium payment.
7. Using your private vehicle for business purposes
Most food delivery drivers use their own car to make their deliveries. However, they don’t bother to inform the insurance companies when they buy insurance online about the usage of the vehicle for commercial purpose. But when you have an accident during one of your food deliveries, your insurance company could refuse coverage for whatever damages you incur.
8. Allow an excluded member to drive your auto which is not included in your list
Excluded drivers should never drive your vehicle, and it is a very similar situation to driving without insurance. Excluded drivers are someone, and you purposely removed from your existing policy. However, when they are behind the wheels for any reason and cause a collision or an accident, it is an offense that will result in the cancellation of your policy.
9. Not informing your insurance company about your new auto
According to the insurance company’s policies, when you are purchasing a new car, the existing policy would cover for the new vehicle for a certain period of time. It is probably between 7 to thirty days from the date of purchase. However, you need to inform your car insurance UAE Company about your new purchase. Your old policy would not be applicable to your new auto, and you need to get a revised quote. Defaulting will result in frauds with increased premiums or policy cancellation.
10. Not informing about the secondary driver
If you are loaning the vehicle, it implies that you are loaning your insurance. But this is against the law. You need to add the information about the secondary driver be it your wife or live-in relationships because your insurance will not cover for the accidents caused by the driver that is not listed in your policy.
If your insurance company believes that you are hiding some information or faking reasons to pay reduced premiums, it will certainly impact on your existing premiums. So when you buy insurance online, ensure that you deliver all the necessary details to avoid forfeit or cancellation of your policies.