UAE Car Insurance Laws 2025 | Rules, Coverage & Fines Explained

Car insurance rules in the UAE change from time to time to improve road safety and make claims more transparent. With 2026 approaching, it is important for drivers to understand how the updated laws work, what type of cover is required, and what insurers expect when you file a claim.

This guide breaks down the major rules in a clear way so you always stay compliant and avoid fines or delays during registration.

Car insurance is required for every vehicle

UAE law requires every car on the road to have an active insurance policy. Without insurance, you cannot register or renew a vehicle in any Emirate. The minimum legal requirement in the UAE is a third-party car insurance policy that covers damage you cause to others. Comprehensive cover is optional but recommended for better protection.

To stay compliant, ensure your policy is valid at all times. You can check your renewal date and download your policy through MyGIG Car if you are a GIG customer.

Minimum third-party liability coverage

The UAE law requires insurers to offer a minimum level of third-party liability cover for bodily injury and damage to other vehicles or property. This ensures that victims of an accident receive compensation even if the at-fault driver cannot pay.

Remember that third-party plans only protect the other person. They do not cover damage to your own car. If you want financial protection for repairs or total loss, a comprehensive policy is necessary.

Comprehensive insurance and what it covers

Comprehensive plans include own damage cover, fire, theft, and often natural events such as flooding or severe rain. Many UAE drivers choose this type of policy because repair costs and spare parts can be expensive. Plans like Motor Perfect and Motor Prestige from GIG also include optional extras such as personal accident cover, roadside assistance and hire car benefits.

Comprehensive insurance is not mandatory under UAE law, but it is widely recommended, especially for newer or higher-value cars.

How the UAE law handles accident responsibility

The UAE follows a police report system for assigning responsibility in accidents. After any collision, you must call the police. They will inspect the scene and issue an electronic report showing who is at fault. Insurers rely fully on this report to process claims.

• A green report means you are not at fault.
• Red report means you are responsible.
• Accident reports are issued through the Dubai Police, Abu Dhabi Police, or Sharjah Police apps.

Never leave the scene without a report. Without it, insurers cannot pay for repairs or compensation.

Mandatory accident reporting

UAE law requires every accident to be reported, even minor ones. Skipping this step can lead to fines. The report also protects both sides by documenting damage. Many insurers now allow you to upload the digital copy directly through their apps or portals, including MyGIG Car. Check out our comprehensive guide that outlines what to do and how to report an accident based on the emirate you are in.

Repair rights under UAE insurance laws

The law outlines how repairs should be handled. Once a claim is approved, your insurer must send the car to an approved garage or agency workshop, depending on your policy. If your plan includes agency repair, you can use the official dealership. If it does not, the insurer will work with certified garages.

Motor Prestige from GIG includes agency repair and added benefits. More details here: Motor Prestige Benefits in the UAE.

Cover for natural disasters and weather damage

The past few years saw severe rain in some Emirates. While third-party plans do not include weather damage, comprehensive plans often do. UAE law does not force insurers to include these covers, so it depends on the policy you choose. If you live in flood-prone areas or park outdoors, choose a plan that specifically lists flooding, storm damage, and natural events.

Insurance rules for modified cars

Modifications such as upgraded exhausts, tinted windows, custom paint, or performance upgrades must be declared. Under UAE law, failing to disclose modifications can void your policy. If your car has changes, inform your insurer during the quote stage. Some modifications are allowed with RTA approval, while others are restricted. You can find out more on the Technical Regulation for Modifications on the UAE government website.

Driving outside the UAE

If you drive to Oman or other GCC countries, you must have cross-border coverage. UAE insurance is not automatically valid in neighbouring countries. When travelling to Oman, you need an Orange Card. Learn more here: UAE to Oman Driving Guide.

Many comprehensive plans offer optional GCC cover. Always check your policy before travelling.

Total loss and valuation rules

When a car is considered a total loss, UAE law requires insurers to evaluate it based on market value, not purchase value. Some enhanced plans, like Motor Prestige, offer extra protection such as back-to-invoice cover for new cars. This reduces the financial impact if the car is written off shortly after purchase.

No Claims Discount under UAE rules

Drivers who stay claim-free often receive a No Claims Discount at renewal. This is not mandated by law but is widely practiced. A clean record can reduce your premium significantly. More details on NCD can be found in this guide from GIG: Understanding No Claims Discount.

Policy renewal and grace periods

Most insurers offer a short grace period for renewals. However, driving with an expired policy is illegal. It also prevents you from completing vehicle registration renewal. Always check your expiry date through MyGIG or SMS reminders.

Claim timelines and insurer obligations

The UAE Insurance Authority requires insurers to respond to claims within a set time frame. They must inspect the car, approve or reject the claim with reasons, and process repairs once approved. Delays should be reported to the Central Bank of the UAE, which regulates insurance providers.

If you want a smooth claim experience, make sure your policy includes guidance and support. GIG customers can track claims easily through their online portal.

Fines for driving without valid insurance

Driving without insurance is a serious violation. Penalties can include fines, black points, and vehicle impoundment. You also risk paying out of pocket for all damages in an accident. Insurance is one of the simplest laws to comply with, so always ensure your policy is active. Know more about black points and traffic fines in the UAE.

Choosing the right plan under new laws

With clearer rules and increased focus on road safety, choosing the right plan matters more than ever. If you want basic legal cover, a third-party policy is enough. For real protection against accidents, natural damage, and theft, a comprehensive plan is recommended.

Final thoughts

UAE car insurance laws in 2026 aim to create safer roads, faster claims, and more transparency for everyone. Knowing the rules helps you avoid fines, choose the right cover, and stay protected throughout the year. Visit the official GIG Gulf Car Insurance page for full details on Comprehensive, Motor Prestige, Motor Perfect, and Third Party car insurance options.