Why is it so expensive to insure a high priced vehicle in Dubai. For the most part, it is the make of the vehicle and the cost to repair it or if it has shown to have a high injury rate.
Insurance Companies are trying to reduce their costs as much as possible for the consumer. There are a few ways behind the scenes that most do not know about, but it is making a difference.
- They have partnered with various auto dealers and repair shops. If they need a vehicle repaired, it would be sent to one of their approved shops for repair. The cost of repairing a vehicle would be less than if they sent it to an independent repair shop.
- Double Dipping – If a vehicle is involved in an accident, the tow truck drivers on the road, are ready to swoop in to be first in line to assist the driver. They will hook up the vehicle and take it to one of their repair shops, for repairs.
A scenario would be, someone has had an accident on the highway, say Emirates Road. A tow truck driver shows up and waits for the police to come, the police take a report and release the vehicle. The tow truck driver offers to help you take your car to a repair shop that does excellent repairs. Sounds good, you agree and the driver hooks up the vehicle and tows it to the shop that they use. If that repair shop is not an insurance approved shop, the Insurance Company may want it towed over to one of their shops. Hence, double dipping or double towing charges.
It may not seem to be that much money, but over a year, it does add up. If you look at 15,000 accidents over a year at AED 200.00 a tow, that would be AED 30,000. If the car had been taken directly to a Company sponsored garage, it would have saved the Company AED 15,000 to be used elsewhere. A small note here, check for storage fees if the vehicle has to stay where it is overnight.
The same reasoning behind having their own Garage affiliates, it saves huge amount of money and they can give their customers a guarantee on the work. It also allows for a quicker response for repairs and immediate rental vehicles if needed, by the customer.
One other way that all insurance companies are saving money is on the processing of documentation. All Company websites have been set up so the brokers have access to their portals. The can write up new policies, changes, claims, or cancellations. They have streamlined their work flow so the brokers are actually doing all the processing.
It is a good business decision. A large portion of the processing is now being done off site, which leaves them more efficient in staff hiring, or for future endeavors down the road.