Car Insurance Premiums Rise in UAE
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Car insurance firms in the UAE were facing losses last year due to increase in rates charged by the various workshops. In order to curb this issue, they have increased the insurance premiums between 15 and 20 percent in the H1 of 2014 and this is expected to rise in the H2 as well. But, this new rate will still be lower than the peak rate achieved sometime back. The companies have increased documentation fee by 20 percent to match the high operating costs.
The spokesperson for insurance companies say that the business has hit quite badly in the past years but due to these hike in prices, things are looking good. Also, new changes are expected when a new decree is passed assuring bank guarantees of 1-3milion for companies thus effecting a wide range of insurance premiums.
Customers tend to look for other insurance firms as soon as they are informed about the cost which leaves little space for competition and more price gap. Thus, in order to create a healthy and competitive market, these rising costs are necessary.
