Car Insurance Myths – True or False

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Image source:

Auto insurance can be very complicated for most people. Like many legal documents, there is a lot of small print on the application. My guess is even if you could read it, you probably wouldn’t understand most of it. It is just legal lingo. This is where your broker or agent can be very helpful. Here are a few myths, some have been around for years.

Myth: Red cars are more expensive to insure

False: It does not make any difference in the premium. High performance cars always seem to be the color red. The price for that type of vehicle was high. You could have a silver corvette and a red corvette and the rate would be the same. 

Myth: If you’re under 25, shopping around for car insurance is a waste of time

False: Each Insurance Company has their own rates. There are some that do charge a higher premium for anyone under 25 years of age, and then there are some that do not.

Tip:  There are Insurance Companies that will add your kids under 25 to your policy. This is great platform for them. It gives them a written insurance history. Their experience driving periodically with your vehicle, will allow them the best rates when they take out their own auto policy.

Myth: Your insurance covers you when you use your car for commercial or business

False: – If you are using your vehicle for any type of commercial use, you would not be covered. Your policy will state  ‘personal/private use”. That is what you signed on the application. If that changes, you need to talk to your agent.

Myth: Your rate will go up if you get into an accident

True:  If you were in an accident that was not your fault, then no, yours rates should not increase (significantly). If you were at fault, yes your rates can increase. Check with your agent. * Some Companies will offer to give you the option of buying an additional rider, that would allow a free accident. That means, the first accident does not count.

* This would only be useful to you with your present insurer. If you move your insurance to another Company, they would base your rate on your driving record.

Myth: If your friend borrows your car and wrecks it, his insurance covers it

False: It is your Insurance. Not your friends insurance. You will have to take care of the damage using your own policy. Be careful who you lend your car too. If they happen to be unlicensed, been drinking or drive carelessly, you will be responsible for all damage or injuries to another party.

Myth: An Auto Insurance Company can charge what they want because auto insurance rates aren’t regulated

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False: There is a regulator watching closely and moreover it’s a competitive market in the UAE so even if they could charge whatever they wanted they’d need to make sure that they’re in the right range if they want to win any business!

Myth: My rates will be similar to my neighbor’s rates

False: Definitely not. There are to many variables involved determining the premium. An example, make, model of car, your age, your driving record and much more.

Myth: “Comprehensive” coverage protects drivers in all situations 

False: Comprehensive coverage does not protect drivers. It is the coverage available for fire, theft, vandalism and a few more.

Myth: If you swerve to avoid hitting an animal on the road and go into a ditch, it is classified as being a not at fault accident 

False: Though unusual in Dubai, this does actually happen! Unfortunately, it is classified as an at fault accident.  While I hate to say this, and totally do not understand the reasoning behind it, they say you are better off hitting the animal. You will still have to pay your deductible, but the Company will consider it a not at fault accident.

**Just a little sidenote – If you have seen the damage that a camel standing on the road can cause to your vehicle, I would take the ditch. The heck with the insurance issue.

Myth – It does not matter if I go to an Insurance Agent or an Insurance Broker, my rates will be the same

False: An Agent works directly with one insurance Company. A broker works as a representative of many Companies. They have more options to offer their clients.

Everyone has an opinion about car insurance in Dubai. Some are correct in their assumptions, other do not have a clue what they are talking about. As a driver on the road, it is your future you are putting at risk. Be prepared and keep yourself informed with all aspects of Insurance. If you have a question, call your broker for the correct answer. The guy across the road is probably just blowing hot air about his rates. Or, come see us at!  

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