Car insurance claims on the rise, drivers should be more diligent on the road and when choosing insurance

COVID-19 and its subsequent implications had led to less people and drivers on the road. As such, it’s been observed that during the pandemic, insurance claims have reduced significantly. With this, insurance companies have also adjusted prices accordingly to reflect lower accidents and repair claims.

However, with UAE’s strong vaccination drive, the country is opening up to tourism and citizens are starting to return to the office. Hence, this trend of reduced accidents and insurance claims is now on a reverse. RSA Insurance shares with RoadSafetyUAE that claims rates are on the rise, and has increased close to 45% in the recent months, compared to during the months of COVID-19. This is now at similar levels as 2019, before the COVID-19 pandemic. RSA observes this alarming result, especially given that some COVID-19 restrictions are still in place, domestic activity has not resumed to 2019 levels, but claims rates have already. The key causes of these claims are preventable. Claims due to wrong action of the driver made up a large portion of the claims (about 40%) in recent months. This includes accidents caused by speeding and not keeping sufficient distance between cars.

Sunita Pais, Head of Claims, RSA UAE states: “As of today, many countries are still implementing restrictions in attempt to control and curb the spread of COVID-19 and its variant strains. UAE is considered, on a global scale, to be one of the first few countries to have resumed similar levels of economic activity, hence this trend of increased car insurance claims is likely to be a reference for other markets. Furthermore, with many countries still imposing strict restrictions on travel, it is likely that this year, many UAE residents will remain in the country, which may amplify the accident rates on the road. RSA also warns that as we approach the peak summer months, where car tire failures are more likely, in combination with more residents staying in the country this summer, drivers should be more alert when driving.”

RSA continues to share with RoadSafetyUAE that with the increase of claims, it is likely that motor insurance prices will begin to readjust itself and increase over the next few months.

Ms. Pais continues: “RSA also urges customers to be cautious when purchasing insurance as intensive competition amongst insurers may mean some products don’t offer sufficient coverage. RSA has observed that since the pandemic started, many customers have switched to Third Party insurance as it is more economical, however it only covers for damages caused by third parties. Importantly, this insurance product does not cover own damages. Hence, it is important to select insurance products from reputable brands, to understand what level of coverage is needed and to read policy wordings carefully before purchasing.”

Thomas Edelmann, Founder and Managing Director of RoadSafetyUAE adds: “Insurance companies are possessing large amounts of data which can play an important role in understanding accident patterns. We are grateful to RSA for sharing their data, as all involved stakeholders want to elevate the discussion from anecdotal evidence to fact-based evidence. It is needless to say that the correct insurance cover is a vital part of road safety and we appreciate the insights RSA shares with the broader public.