Starting January 1, 2025, health and motor insurance premiums in Dubai will increase as insurers adjust rates to keep up with rising healthcare costs and vehicle repair expenses.
Industry experts predict a more significant hike in health insurance premiums compared to motor insurance, with new benefits introduced for residents.
Why Are Premiums Increasing?
Global inflation has impacted the UAE, though local inflation remains lower than the global average, hovering around 2%, compared to 5–6% worldwide. Rising healthcare costs and inflation are driving insurers to revise their premiums to ensure adequate coverage for policyholders.
Avinash Babur, founder and CEO of Insurancemarket.ae, explained, “Insurance premiums and benefits in health and motor sectors will undergo changes to match rising expenses and evolving claim patterns. This ensures balance between affordability and financial sustainability for insurers.”
Babur also noted that the withdrawal of pandemic-era discounts contributed to this upward trend.
Impact on Health Insurance
According to a circular from the Dubai Health Authority (DHA), health insurance premiums will see changes to improve coverage quality. Toshita Chauhan, business head at Policybazaar.ae, expects premiums to increase by 5–20%, depending on the added benefits in the plans.
She explained, “Health insurance premiums could rise by 10–15% due to healthcare inflation, increasing claims, and higher medical service costs. The exact change will depend on the insurer and the policy type.”
Motor Insurance Adjustments
While motor insurance premiums will also rise, the increase is expected to be more modest compared to health insurance. Babur pointed out that last year’s premium hikes were driven by events like floods and the removal of Covid-related discounts. For 2025, adjustments in motor insurance rates will likely be less dramatic.
What Should Residents Do?
Experts suggest that Dubai residents plan their insurance purchases carefully:
- Act Now: Renew policies early to lock in current rates and avoid fines or gaps in coverage.
- Wait for Benefits: If interested in enhanced benefits, consider waiting until January 1, 2025, when the updated policies take effect.
Chauhan advised, “Residents looking to save on premiums should act now, as renewing policies before the changes may help secure lower rates. For those prioritizing better coverage, the revised options coming in 2025 might be worth the wait.”
Moin ur Rehman, executive director at Unitrust Insurance Broker, confirmed that Dubai visa holders will gain additional benefits, which could affect new and renewal policies starting next year.
Final Thoughts
The rise in health and motor insurance premiums in Dubai reflects increasing costs in healthcare and vehicle repairs. While this may affect budgets, it also brings better coverage options for residents. By planning ahead, individuals can secure the best value for their insurance needs.
