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Understanding Motor Insurance and Insurance Terminology in UAE

Blame it on the weather, our relaxed lifestyles, or just patchy public transport, but living and working without a car in this part of the world is practically impossible. And can we please address the advertising. On every platform available to mankind, we are besieged by brand new cars with great payment options, 20-inch alloy wheels, 360-degree cameras and adaptive cruise control.

So you decide to buy that car.

But there’s a catch. Did you know that you cannot buy a car without also purchasing car insurance? According to the Road Transport Authority, a valid motor insurance policy is a prerequisite to car registration or re-registration in the UAE.

So you decide to buy motor insurance too.

And now the realization dawns…information overload is a very real monster and deciding what kind of insurance to go for is more than a little daunting.

And here’s where we come in. At Oasis Insurance, we ensure the customer knows all he needs to insure the best possible outcome, pun intended.

Types of Car Insurance

There are two major types of Car Insurance available to the UAE driver:

Third Party Liability Insurance

First, some good news. This type of insurance is as easy to understand as 1,2,3! Literally.

Party 1: The one who buys the Insurance policy, in other words, the Insured.

Party 2: The company that sells the policy, i.e., the Insurer.

Party 3: The person (s) that makes a claim for compensation.

Picture this. You are maneuvering your rather large SUV out of a comically small parallel parking slot in a crowded neighborhood. And BAM! Your rear bumper makes solid, metal crunching, ear splitting contact with the little sports number parked right behind you.

Here is where the Third Party Liability Insurance comes into play. Depending on the value of your policy cover, the Insurance company pays compensation to the Claimant for car repairs or bodily harm.

As for your SUV (or minivan for that matter), those repairs will come from your own pocket.

Which brings us naturally to…

Comprehensive Car Insurance

As the name implies, this type of insurance covers damage to both your car and the car you unwittingly damaged.

Now depending on what Insurance company you sign up with, the following can be bought as extra add-ons or already be included in the policy. These include Roadside Assistance, Accidental Fire and Theft among many others.

Understanding Insurance Terminology…

When Motor Insurance shopping, clarity on terminology is key to making better decisions. Although the list is extensive, some keywords to be familiar with include:

Deductible / Excess

A pre-arranged amount that the insurance company deducts from your settlement


The amount paid to the insurance company for insurance of your car. The premium is calculated based on various factors including your driving record, age and type of car.


As the name implies, these are risks that are ‘excluded’ from coverage by Insurance.

Write off

This is when the value of the car is less that the amount needed for repairs.


Special inclusions or exclusions to the policy are called endorsements. Examples may include vehicular damage due to war or radiation and even damage due to vehicle being driven by a person without a valid driver’s licence.


A settlement is the amount paid to the claimant by your insurance for damages caused.

Making a Decision

Decision making then boils down to having all the information and documents you need. These include copies of your Emirates ID, Driver’s Licence, Visa page in your passport etc.

A few key factors to consider include:

Agency Repairs

Compare policies to see which ones include repairs at the car manufacturer’s agency and the ones that are limited to generic garage repairs.  

Insurance Bonus

When changing your insurance provider, make sure you obtain a ‘No Claims’ certificate from them. This entitles you to a concession on the premium at the new insurance provider.

After that, it is just a matter of deciding your budget, specifying your requirements and deciding on the add-ons, if any.

Good luck!



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