21 Vehicle Purchase and Insurance in the UAE

A Brief Legislative Overview by Real Law

Who Would Benefit from This Overview

• Tourists and expatriates moving to the UAE,
• Car dealerships and insurance companies,
• Entrepreneurs and investors,
• Business consultants,
• Accountants and auditors,
• Lawyers and related professionals.

Key Issues

• Rights and obligations of the insured and the insurer,
• Types of car (vehicle) insurance,
• Requirements for mandatory car (vehicle) insurance,
• Vehicle registration upon purchase.

Insurance Regulation

The UAE Central Bank and transportation authorities of the emirates regulate vehicle insurance policies. Insurance companies are required to adhere to standardized regulations and cannot alter policies without approval from the regulatory authorities.

According to Article 27 of Federal Decree-Law No. 48 of 2023 Regulating Insurance Activities :

- All vehicles registered in the UAE must have mandatory insurance — third-party liability insurance.
- The UAE Central Bank (CBUAE) sets the rates based on the risk level associated with each vehicle.

There Are Two Types of Car (Vehicle) Insurance in the UAE:

1. Third-Party Liability Insurance: This mandator...