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Of interest - Auto insurance charged by nationality: Europeans benefit in United Arab Emirates

Guthrie Insurance

Came across this item of interest. It is hard to imagine an insurance company being able to base their premiums on nationality. Only in UAE? What would Canadians pay?

Pay 28% less than prevailing market rate; Auto premiums fell in Q1 as number of accidents declined.

PublishedTuesday, March 19, 2013

Insurance industry officials have claimed that some of firms have resorted to setting vehicle insurance rates according to the nationality of the driver rather than performance here in the UAE.

According to a report in the Al Ittihad newspaper, insurance companies have decided to charge different rates after their customer database showed that certain nationalities caused more losses than others.

European nationals living in the UAE benefitted the most as they paid just 1.8 per cent of their vehicle's estimated price as insurance premium, 28 per cent less than the prevailng market rate.

Emiratis paid about 2.5 per cent while other Arab nationals were charged 3.5 per cent of the car's value, while Russians were charged 4.5 per cent.

FareedLutfi, Secretary General of the Emirates Insurance Association, criticised linking auto insurance premiums with nationality.

He said it is not practical to reduce risk by charging premiums according to nationality, especially in the UAE where more than 200 different nationalities live.

The report also stated that saloon car insurance rates in the UAE dropped 10 per cent in the first quarter of this year as compared to the 2.75 per cent fall recorded for the same quarter last year.

Industry officials told that 4x4 vehicle insurance rates fell by about 23 per cent in the first quarter as against 3.25 per cent for the same quarter last year.

The officials attributed drop in insurance rates to improved road network of the UAE which led to fewer accidents on the highways.

Source: Emirates 24/7 - Dubai Media Inc

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