In other parts of the world, car insurance premiums are influenced by several contributing factors, including the driver’s age and gender, as well as the make, value and model of car and the insured person’s driving record and accident history.
Until now, insurance premiums in this country have been calculated solely on the basis of the worth and age of the car you drive.Whether the person behind the wheel might be high- or low-risk, a safe driver or an impetuous one, had no impact.
All this could change as the UAE considers new rules on motor insurance standards.
As The National reported yesterday, the UAE Insurance Authority has prepared a draft law to standardise car policies, which has been referred to the federal Cabinet for approval.
If the policy moves forward, it could have several effects: the difference between having a clean driving history and one that’s laden with previous accidents could potentially add hundreds (possibly thousands) of dirhams to an annual insurance premium. Accumulate multiple penalties and you might become uninsurable; drive a high-performance, high-value car while you are young and you may find yourself paying a heavy price.
But there are also benefits to this potential recalibration. As Dr Abdullah Zineddin, a road-safety specialist in Abu Dhabi, has pointed out, such a rule change is likely to have a profound effect on the way we drive.
The proliferation of speed cameras in the UAE has already delivered demonstrable returns in terms of driver behaviour in the short time since they became a roadside fixture. There is, however, still plenty of room for improvement in that regard.
Evidence suggests the number of accidents and violations comes down when a driver is hit in his pocket for the crash he has on the road. Regulations might be written so that if a driver got a speeding ticket, his or her insurance premium would rise too. This could be a big boost for road safety.
Such carrot-and-stick measures have been effective in reducing accidents elsewhere in the world. There is no reason why a switch to risk-based insurance would not deliver similar results here.
