What happens if you don't have enough Car Insurance?

Having less insurance means being underinsured wherein the insured has coverage that is very limited. It may not be high enough to cover all the expenses of the claim. 

Accidents may happen at any time and if the car driver who is at fault is underinsured, then the consequences may be very severe. Drivers are required to carry insurance and they should have medical coverage as well. 

If you want to drive a car in the UAE, then it is very much mandatory to have car insurance. If you are caught without insurance then you will have to pay a penalty of AED 500 and also you will get four black points on your driving license. The car will be confiscated for seven days for not having the insurance. If you have black points on your license then the car insurance prices will be affected. 

Check: What happens if you get into a car accident uninsured? 

What is Insufficient coverage?

Insufficient Motor coverage may come into the picture when the insurance holder wants to reduce the insurance expenses and may opt to take lesser insurance. The insurance holder may take lesser policy coverage. A lower limit of insurance will reduce the expenses for policyholders but increase the risk of loss to the policyholder. A basic insurance policy may be taken by the policy to have protection and escape from the penalties.   

Just having minimum insurance for the sake of having insurance will not be sufficient to provide protection against serious accidents. The damages that occur in serious accidents are higher. The medical expenses, damages to motor vehicles, damages to the other opposite drivers and other expenses cannot be covered if the policyholder has insufficient insurance coverage. 

If you are a victim in the accident and if you have enough insurance coverage then the expenses incurred on recovering from the incident will be covered under insurance. On the other hand, having under the insurance will result in expenses that should be borne out of pocket by the policyholder. If there is a sufficient coverage policy then the vehicle will also be replaced by the insurance company after the incident. All it requires is, you must carry sufficient coverage to get the benefits. 

What happens if you are not having enough car insurance?

You will be facing serious consequences if you are found responsible for damages to another party. 

• Physical injuries are expensive and other associated expenses such as ambulance rides and ER check-up are very high. 
• If the other party is not injured then their expenses such as repairs to the vehicle, medical bills can be very high. 
• If the other party is severely injured or killed then the policyholder will face severe penalty and sometimes legal action may also be taken.
• If the car is damaged in the accident, then the car may be totaled and damages shall be provided based on the coverage. 
• If there are small dents to the car these may not be covered for repairs if there is no sufficient insurance and it costs several thousands of Dirhams for the repairs.
• If you have not taken liability insurance then you will be financially drenched in all the expenses. This is the reason that insurance companies advise people to take liability insurance otherwise life will be turned upside down in just one incident. 

If you have just basic insurance coverage wherein the limit on insurance is AED 20,000. If the damages incurred at fault are found to be AED 30,000, then the additional AED 10,000 should be paid by the policyholder. Here this is just an example the actual amounts may differ. You should be ready to pay for the excess expenses over the coverage. 

If you are unable to pay the damages then you will fall into serious problems. The injured party can take serious action against you and you might have to go for loans and mortgage your assets to pay the claims raised by the other party. If the circumstances are serious then your personal property can also be confiscated until damages are cleared. The legal authorities may also suspend your driver’s license until you clear all the dues. 

It is always important to have high insurance liability limits. Having high insurance limits will protect you in bad situations. The insurance company will be responsible for paying all the expenses related to the accident and you can just recover from the accident. You need not pay any amounts out of your pocket if you have sufficient car insurance. 

No one encourages to have insufficient car insurance. If you want to reduce expenses on insurance and want to avoid legal proceedings for not having car insurance only policyholders opt for basic car insurance. It is not wise to take this decision as the results will be serious and expensive.

Conduct good market research and select the best car insurance plan according to your driving requirements. Depending on your driving, car condition, your age and age of the vehicle, level of experience and expertise you can choose the best policy. The best car insurance can be a problem solver for all future problems. The first thing that you should do is find the best car insurance, save your money and protect against future problems. 

Conclusion

Accidents create a sense of fear, they are associated with traumatic events and disturb physically, emotionally and financially. Not having enough car insurance can still worsen the situation. Always make sure that you have sufficient car insurance in the UAE. When you take your car out on the roads ensure that you have comprehensive or third party liability car insurance. Take time to renew car insurance and ensure that the insurance policy is not expired before you start driving your car. A small premium amount monthly can give you peace of mind and also protect you and your family from unforeseen events. Be wise and take sufficient car insurance to protect against any bad experiences. But also ensure you are not adding unnecessary add-ons to the policy which can make your premium expensive and of no use.