Dubai: UAE car owners will not be getting any immediate relief on what they are paying for motor insurance renewals – any slowdown in premium hikes might have to wait until June, say industry sources.

Average insurance premiums charged on vehicle renewals in January and February were around 15%- 20% higher compared to what their owners paid a year ago.

“Contrary to early expectations, the UAE is yet to see a slowdown in motor premium hikes,” said Avinash Babur, CEO of InsuranceMarket.ae. “UAE insurers are still pricing cautiously based on their losses/claims from last year.”

What it all adds up to for car owners is a higher expense on their motor renewals for a third straight year. It was in 2023 that motor premiums started to rise in the UAE, with insurers told to stop the practice of offering heavy discounts and to ensure their rates are in tune with market averages.

Then, in April 2024, the rains happened and that messed up insurers’ and vehicle owners; calculations. If any repair had to be carried out as a result of damages from the flooding, then those vehicles attracted instant 20%-30% premiums hikes on renewals. Even on vehicles that had no claims from the rains or other incidents, their owners were asked to pay 5%-15% higher, depending on the model, age of the vehicle, etc. (And for any car owner insisting on agency repairs in their policies, the cost acceleration on insurance renewals was even higher.)

“The April 2024 rains forced insurers to drastically alter their motor policies for their financials to remain above water,” said a top official at a local insurer. “If those motor premium hikes were not enforced, the losses would have been even more substantial.”

Based on 2025 renewals, a comprehensive insurance cover on a Toyota Corolla or Nissan Sunny would be between Dh1,200-Dh1,500. This would also be the range for Honda Civic and Mazda 6 owners.

A Camry or the Kia K5 insurance premium would be Dh1,500-Dh1,800, while renewal on a Land Cruiser and Range Rover Sport would likely be from Dh3,500 to Dh5,500+, according to data from InsuranceMarket.ae.

On the EV side, a Tesla Model 3 and mid-priced models in the same category would require Dh2,800-Dh3,800 for an insurance cover.  

For EV owners, there are reasons for some cheer. “So far this year, EV insurance premiums have stabilized, following notable increases throughout 2024,” said Babur.

“EVs were also among the worst affected vehicle categories during the April 2024 floods, as battery damage and replacement costs ended up being significantly higher than standard repairs, prompting insurers to price in this additional risk.

“In comparison, renewal premiums in 2025 have seen only modest increases – 7% to 10% – and in some cases, policyholders with no claims are receiving flat or slightly lower premiums.”