Dubai, UAE: Starting January 1, 2025, residents in Dubai will face higher insurance premiums for health and motor coverage as insurers adjust rates to accommodate rising healthcare costs, inflation, and vehicle repair expenses. While premiums are set to increase, new benefits will also be introduced, providing enhanced coverage options for policyholders.
Health Insurance to See Larger Hike
Industry experts predict that health insurance premiums will witness a more significant rise compared to motor insurance. According to Toshita Chauhan, business head for health and motor insurance at policybazaar.ae, premiums could increase by 5% to 20%, depending on the additional benefits included in the revised health plans.
Chauhan also highlighted a Dubai Health Authority (DHA) circular mandating revisions to improve the quality of health coverage. These changes aim to address healthcare inflation and the rising cost of medical services.
Motor Insurance Adjustments
Motor insurance premiums are expected to see a modest increase compared to last year’s hikes, which were driven by higher claims from natural events like floods and the removal of pandemic-era discounts. Insurancemarket.ae CEO Avinash Babur estimates that adjustments will remain moderate in the motor insurance sector this year.
Key Factors Driving Increases
The rise in premiums is attributed to several factors:
- Healthcare Inflation: Rising costs of medical services and increasing claims.
- Withdrawal of Discounts: Pandemic-era discounts have been phased out, impacting pricing.
- Enhanced Benefits: New benefits for Dubai visa holders and improved claim settlements are being implemented.
According to Moin ur Rehman, executive director at Unitrust Insurance Broker, these new benefits will affect both new and renewal policies after January 1, 2025.
Is Now the Right Time to Buy Insurance?
Experts suggest two options for residents:
- Act Now: For those looking to save, locking in current rates before the price hike can help avoid higher premiums.
- Wait for Enhanced Benefits: Residents who prioritize enhanced coverage may benefit from waiting until the new benefits take effect in 2025.
“Planning your insurance renewal or purchase ahead of time ensures adequate coverage and avoids potential penalties or gaps,” Babur advised.
Up to 20% Increase Expected
While health insurance premiums could see an increase of 10% to 15% on average, some plans might rise by as much as 20%, depending on the insurer and policy type. Motor insurance adjustments are expected to be less pronounced.
Looking Ahead
The revisions in insurance premiums reflect the evolving cost structures and claim patterns over the past year. While the increases may challenge affordability for some, the addition of enhanced benefits aims to provide greater value and security to policyholders.
Dubai residents are encouraged to carefully review their insurance options to make informed decisions, ensuring the right balance between cost and coverage.
