Cheap Car Insurance? You Might Pay More at the Time of Claim

by Steffi Sharma Business Representative

Car insurance is basically a contact that you and the insurance company enter into .Here the insurance company agrees to protect you in case you meet with any financial loss. It also covers you in case of a theft of your car or if you meet with an accident. In return for this protection you agree to pay the insurance company a premium.

Most of them when they go shopping to buy a car insurance policy, only compare the insurance policies based on the premium that the company is offering. The lower the premium the more attractive is the insurance policy. But is this the right way to purchase your car insurance?

Check the Policy And Read About the Dubai Insurance Deductible

Many car insurance companies would quote cheaper premium amounts to lure customers. However this may not be the best plan for you.

A car insurance deductible is the amount that you need to pay in excess out of your pocket before the insurance company pays for any loss at the time of a claim. This is a major factor that decides the premium amount that the insurance company is charging you.

When you go to buy a Dubai Insurance policy, you and the insurance company get into a deal to insure your car and any third party damage. The insurance company charges you a premium for the same. However they also offer you an option to give out a discount on the premium provided you are ready to pay a part of the damage before you claim for the insurance amount.

Why Does The Dubai Insurance Company List Offer Cheap Car Insurance When The Deductible Amount Is Higher?

Increasing the deductible amount works to the benefit of the insurance company. In this way the company is basically passing on some of the risks to you. This means that in the case of an eventuality the insurance company would not have to bear the complete expense. In fact the insurance company would only be paying after you have paid the deductible amount. So you pay the complete deductible amount first and in case if still needed the remaining amount is paid by the insurance company.

This reduces the risk for the car insurance companies in Dubai company and it thus offers you a cheaper car insurance plan. It is up to you whether you wish to but cheap car insurance policies now and then pay at the time of claiming. However this may not be the best decision every time because it could happen then you may end up paying more from your pocket when you actually have to claim the insurance.

Understand The Risks Involved When You Buy A Cheap Car Insurance Policy With A High Deductible 

The biggest reason why one would opt for a car Dubai Insurance policy with high deductible is to save on Dubai national insurance premium. At times the Dubai Insurance premium amount is as low as 30 percent. These are just estimates but you need work out for yourself if the amount that you are saving on premium by agreeing to take on the risk in the form of higher deductibles is even worth it.

Things That You Should Consider Before Opting For A High Deductible Plan

You need to do a quick calculation to figure that out for the list of insurance companies in Dubai. What is the time span for the savings from the Dubai Insurance premium to equal the cost of the deductible amount?

Before you agree to buy a Dubai Insurance policy that offers high deductible and low premiums, you should first consider the following things:

• How much will you be saving on the rates offered?
  
• Are you emotionally as well as financially strong enough to pay that amount when you need to make a claim
  
• If you are living on a tight budget then going for a high deductible plan is not recommended
  
• If you however are good at managing money and have some liquid amount in your bank always then this could be a good option
  

The decision that you take is solely on your personal choice. Some people after increasing the deductible amount realize that spending that extra money is more of a burden and they thus want to lower the deductible amount. There are others who use the high deductible amount to make them resist making claims.

How Should You Choose The Auto Insurance Deductible Amount

Answer these questions to figure out the deductible amount.

·         Evaluate your emergency fund – Do you have an emergency fund in order or is it mostly consumed? If you have chosen a high deductible amount but do not have liquid money to pay for it at the time of emergency then it makes no sense to opt for such a high deductible amount

·         Your vehicles value- If you have a high-end luxury vehicle then the Dubai Insurance premium is going to be higher. You can thus opt for a higher deductible amount because the saving on the insurance premium would be substantial. However in the case of an a claim be ready to pay for the costs from your pocket.

·         If your vehicle is old, you are sure to see physical damage often. It is thus not beneficial to go for a high deductible plan.

·         Understand your risk – What are the chances that you will file a claim? Driver risk is something that you know of and there are driver risks involved even if you consider yourself to be a safe driver.

Third Party Cover Or Comprehensive Cover

Even if you are the best driver there would have been times when you would have been a victim to third party negligence and had to fill Dubai insurance claim form. It is thus important that you get a car Dubai Insurance policy. But what your car insurance will cover is dependent on what kind of a policy you have purchased.

You can purchase a comprehensive Dubai Insurance policy which covers any damage to your car as well as any third party damage. You may also choose to buy only the third party coverage where you and your car do not get covered. If you are looking for a cheap insurance policy then this means that you are considering buying a third party cover and are ready to pay for all your damages yourself in case of an accident.

Buying a cheap car Dubai Insurance policy may always not end up to be beneficial. It may happen that there is a lot of damage caused to your car and since you only had a third party cover you have to bear the complete expense of your car yourself. It may turn out to be more expensive than if you had brought the comprehensive plan and paid the extra premium on Dubai insurance Dubai.

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Created on Jan 2nd 2019 03:23. Viewed 387 times.

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