Grey imports, only 3rd party insurance cover ?

[cain-it]

My wife heard on the Dubai Eye radio station yesterday, that local insurance companies will now only insure non GGC spec cars (grey imports) 3rd party cover.

I called my insurance company to check this (AXA) and they confirmed they won't insure non GGC spec cars fully comprehensive.

Considering how many grey imports that are here from Japan / USA / Mainland Europe.... thats a big deal! Car souqs such as Al Awir & Sharjah are full of them.

Already theres a lack of cover if you own an older car (which could be rare / worth a lot) that its not covered, but if this is the case for new / newer grey imports too, this is bad news.

Does anyone (ideally from the local insurance industry ) know the full story ?

[Fats25]

I work for an Insurance company here, an international rather than local. I am not on the business side, but as far as I am aware there is nothing that stipulates an insurer can only offer TP insurance on Grey Imports. That being said, it is not a market the insurers are actively going after. The repair costs for grey import can be higher than a GCC car, due to time to get parts, shipping etc. The business model does not stack up (same as in UK where Grey Imports are typically more expensive to insure).

The insurance industry over here is very regulated with how premium can be applied. As you know it is value based, and insurers struggle to value a grey import. The main valuation engines here in the UAE do not have a grey import valuing tool, although I know they are looking into generating this soon. This will primarily be for US import cars, as that is the largest market, and they are looking to hook into Carproof (replacing Carfax that was purchased a couple of years ago) for the history, and therefore the valuations.

You may also not be aware that it is mandatory for an insurer to offer a quote on a TP basis for any registered vehicle. That is despite many insurers (particularly international) not wanting to get into the TP market. They still have to offer a quote, which typically will not be competitive.

To summarize I don't believe there is any regulator directive, to only offer TP insurance. I think what has happened is that insurers do not want the grey import book of business, and they can refuse to quote on FC. However they have to quote on TP. Hence you get TP quotes for Grey Imports.

Next time I speak to my Auto person I will confirm the above is true, or if there is a directive that only TP cover can be issued for Grey Imports.

[James72911]

not sure on the specifics of the insurance cover, but I heard the beginning of that interview too - had to turn over as it was full of so much nonsense...

[cain-it]

Thanks for your info Fats25.

I spoke to a broker today and asked the question. At first they said non UAE / GGC supplied cars can get comp insurance, but not agency repairs.

Then they double checked and confirmed that since Jan '17 you can't get fully comp on non GGC spec cars.

So again this seems to imply some change has happened recently.

I have a 1998 Elise over here in Dubai, imported from Europe. I know that only gets TP cover due to its age, so I just have to live with the risk unfortunately. A risk that wouldn't need to happen in other counties. I still dont know why older cars can't get full cover based on their true market value, their worth doesn't suddenly fall off a cliff after 6-7 years.

However I was interested in importing another Lotus (MY 2016 / 17) from Europe, a spec thats not available here in the GGC. But if I can't get fully comp cover, the value of that car would just be too high a risk.

Considering the large quantity of imported cars, often new & valuable (Toyota Tundras for example) I still find it difficult to understand that all these cars suddenly have only 3rd party cover.

Any further clarity welcome

Edited by cain-it on Thursday 9th February 11:01

[Fats25]

I need to be careful with how much I write here, but if you want to PM me, I will give you my mobile number, and we can discuss further.

The bits I can say on here following a discussion I just had with head of Auto:-

1) We have not had any directive at all from the Insurance Authority to stop offering Fully Comp on Grey Imports.
2) We were recently at a IA session where they were trying to encourage all insurers to get policies to cover Electric Vehicles Fully Comp. As these are all Grey Imports, that contradicts point 1 (if there was a directive).
3) The fact that 1 & 2 are at odds with each other is not a surprise.

Even though we have not had a directive on 1, we will not insure grey imports Fully Comp. Is due to the volumes of fraud we have seen when we used to offer this. Total Loss cars, being insured at full value, and then a (planned) accident resulting in a claim, that we had to pay in full. We even saw the same vehicle that had been sent to salvage come back through for another total write off claim!

So the fact that the Brokers are not offering, seems to me to be more likely that other insurers are following our lead, and they are running out of underwriters prepared to insure, rather than any directive. We believe you will find a local insurer to cover it - but you need to select based on the service you want receive!

[Fats25]

cain-it said:

So again this seems to imply some change has happened recently.

I didn't comment on this - yes there have been lots of changes recently (including changes to min/max premiums) recently.

See my other thread further down where someone was questioning the cost of insurance over here, and it will explain more. I am well aware of these as it means a lot of work for me, and my teams. Hence I was not aware of the TP for Grey Import piece, as I had not seen anywhere. Also had it confirmed by my head of Auto that they have also not seen anything (even though would not be relevant for us).