UAE Car Insurance Market Overview

Market Size in 2025: USD 4.24 Million

Market Size in 2034: USD 15.45 Million

Market Growth Rate 2026-2034: 15.46%

According to IMARC Group's latest research publication, "UAE Car Insurance Market: Industry Trends, Share, Size, Growth, Opportunity and Forecast 2026-2034", The UAE car insurance market size was valued at USD 4.24 Million in 2025 and is projected to reach USD 15.45 Million by 2034, growing at a compound annual growth rate of 15.46% from 2026-2034.

How AI is Reshaping the Future of UAE Car Insurance Market

• Revolutionizing Claims Processing: Insurers like Tokio Marine UAE have implemented AI-based document processing that tripled daily claims capacity, with some companies reducing processing times by 90%, enabling settlements in days rather than weeks.
• Enabling Usage-Based Insurance Models: With telematics powered by AI analysis, 27% of UAE motorists would switch insurers for discounts greater than 15%, transforming the traditional flat-rate pricing approach into behavior-based premiums.
• Fighting Fraud with Machine Learning: AI systems cross-reference thousands of data points to detect suspicious claims, analyzing inconsistencies between GPS data and damage reports, reducing false claims significantly across the industry.
• Powering Digital-First Customer Experience: Platforms like Shory and PolicyBazaar leverage AI-driven chatbots providing 24/7 support, with online sales jumping from less than 1% five years ago to 5-7% of the motor insurance market currently.
• Optimizing Premium Calculations: Real-time telematics data from accelerometers, GPS, and gyro sensors enable insurers to calculate personalized premiums based on driving patterns like night-time kilometers and urban rush-hour ratios.

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UAE Car Insurance Market Trends & Drivers:

Mandatory car insurance rules in the UAE are the basis of the car insurance industry. Third-party liability cover is mandatory on all vehicles. In the UAE, the minimum legal car insurance coverage is for AED 2 million for damages and AED 5 million for injuries. If caught driving without insurance, the penalty is AED 500 with four black points, a towing and impounding of the vehicle for a minimum of seven days to a maximum of 15 days (UAE Insurance Authority Circular No. By 06/2025, regulations had been introduced for the usage-based insurance products, and in July 2025 the flood insurance product became mandatory. Because around 200000 cars are sold per year, the purchase of a new vehicle requires the purchase of new car insurance for the new vehicle.

Telematics (or usage-based insurance) is expected to transform how residents in the UAE pay for car insurance premiums with 5G Phase-2 by Etisalat and Du, through drivers being tracked by insurers with metrics that include accelerometer spikes (which indicate how hard the driver has braked), GPS (which logs average speed) and photos taken of them using mobile phones while driving. Numerous cashback policies exist, including "Beema SmartDriver", launched by Beema Insurance in January 2022. Global professional services firm PwC Middle East claims behavior based insurance products appeal to cost driven drivers. Usage-based pricing or telematics-rich insurance models provide the best outcomes for low-risk drivers. Regulatory approval by the UAE's Insurance Authority and the presence of over 30% of MENA fintech startups give rise to greater telematics integration and the associated benefits in this region.

With 24000 electric vehicles and hybrids sold in 2024, a specialist EV insurance market developed. EV insurance premiums in the UAE average around AED 4992 (US$1293) annually. Due to the battery manufacturing and electric motor, the premium is 20% to 35% higher than ICE counterparts. Average insurance on ICEs is AED 2895 (US$788). The battery and motor contribute to 40% of the cost, which ranges from AED 60,000 to AED 80,000. In October 2024, Abu Dhabi National Insurance Company launched EV insurance that covers battery deterioration and availability to charge. According to the Central Bank of UAE, auto insurers should provide a discount of up to 25% on qualifying EVs. As the EV repair market matured, some insurers reported premiums for claim-free EVs leveled off or decreased from 2025 as premiums remained steady.

UAE Car Insurance Industry Segmentation:

The report has segmented the market into the following categories:

Coverage Insights:

• Third-Party Liability Coverage
• Collision/Comprehensive/Other Optional Coverage

Application Insights:

• Personal Vehicles
• Commercial Vehicles

Distribution Channel Insights:

• Direct Sales
• Individual Agents
• Brokers
• Banks
• Online
• Others

Regional Insights:

• Dubai
• Abu Dhabi
• Sharjah
• Others

Competitive Landscape:

The competitive landscape of the industry has also been examined along with the profiles of the key players.

Recent News and Developments in UAE Car Insurance Market

• January 2025: Sukoon Insurance launched a new comprehensive motor insurance policy with additional coverage options and enhanced customer protection features, expanding its reach across all emirates including operations in Oman and Qatar.
• January 2025: Motor insurance premiums in UAE increased by 15-20% for renewal policies compared to the previous year, driven by cautious pricing strategies following high claims from April 2024 flooding events.
• February 2025: The Insurance Brokers' Regulation 2024 took effect on 15 February 2025, requiring claim payments to be made directly from insurers to policyholders and prohibiting brokers from collecting premiums without specific authorization.

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