The Insurance Union rules out an increase in the prices of car policies in 2026

Vice Chairman of the Supreme Technical Committee and Head of the Automotive Committee at the Emirates Insurance Federation, Mohammed Mazhar Hamada, ruled out that the prices of regular vehicle insurance policies will witness a price increase during the next year 2026, due to competition between insurance companies to attract the largest number of insureds, which would keep prices as they are, or tend somewhat to decline.

Hamada said in special statements to “Emirates Today”, in response to the concerns some people are circulating about an expected price increase in the prices of insurance policies for traditional cars, not electric cars, starting from the beginning of 2026: “Fears about an increase in the prices of insurance policies for traditional or regular vehicles are unlikely during the next year, and there are no justifications for that.”

Hamada stressed that “the market is witnessing a state of strong competition between companies, which may push prices to a downward path or at least stabilize at the same current levels,” pointing out that “the existing fears are not about raising the price, but rather from the behavior of some speculators, or competition between companies, which leads to its decline, not its rise.”

Hamada continued: “Insurance companies move to set the price between the minimum and maximum limits stipulated in the unified document, and they cannot be exceeded according to the instructions of the regulatory authority, but it is important that there is an adequate estimate of the size of the risks and the required coverage, in a way that takes into account the interests of the companies and the insured, and in a way that ensures the preservation of the reputation of the insurance market in the country and its leadership in the region.”

Hamada denied the existence of any discussions or consultations between insurance companies related to increasing prices during the next year under the umbrella of the Emirates Insurance Federation.

It is noteworthy that the year 2024 witnessed a noticeable increase in the prices of “comprehensive” and “against third parties” insurance policies, but within the established limits, after some companies incurred significant losses, as a result of reducing the price of the policies to the minimum in the years 2022 and 2023, and some companies entered into what was known as “price burning,” at a time when paid claims maintained their annual growth in light of the increase in the number of insurance policies.

Prices in 2024 recorded an increase of about 25%, compared to the previous two years, but since the beginning of 2025, stability has prevailed, and balance has returned to the market again, with a slight increase in the average price ranging between 2 and 4% of the value of the car, depending on its type, the age of the driver, and driving history, and not exceeding the 5% ceiling specified by the Central Bank.

Car insurance is one of the main pillars of the insurance sector in the UAE, as it is legally mandatory and provides financial protection for road users.

The obligations of insurance companies vary depending on the type of policy. In the “third party insurance” policy, companies are obligated to compensate for material and physical damages caused to the third party, in addition to bearing legal liability resulting from accidents, without covering damage to the insured’s vehicle.

As for the “comprehensive insurance” policy, it offers a broader scope of protection, as it includes compensation for damage to the insured’s vehicle, in addition to third-party coverage, as well as additional coverages such as fire, theft, and roadside assistance services, according to the agreed upon conditions.

Specialists confirm that clarity of obligations and speed of settlement of claims enhances customers’ confidence, while the choice of the type of document remains linked to the value of the vehicle and the level of protection required.