July 3, 2026

What Is a Motor Insurance Excess and How Does It Work in the UAE?

What If your vehicle was involved in a traffic accident, you’re assessing damages to file an insurance claim, and then you find out that you still have to pay a part of the bill from your own pocket. Despite being prepared, motor insurance excess may catch many drivers off guard, as they are under the impression that their car insurance will cover all damages. So, before looking for the best motor insurance in UAE, let us understand what insurance excess means and how it works.

What is motor insurance excess?

Motor insurance excess refers to the amount the driver agrees to pay when making an insurance claim. In simple words, the share of the cost you pay before your insurance provider steps in to cover the rest. For example, if your policy has an excess of AED 500, and you have an accident that causes AED 2000 in damage, you’ll have to pay the first AED 500, and then your car insurance company covers the remaining AED 1500. Excess is the first amount payable in case of a claim; it is essentially the uninsured portion of your damage. Different insurance companies charge different levels of excess based on their rates.

Types of motor insurance excess

Are all motor insurance excess payments the same? The simple answer is no; the amount you pay depends on the type of excess. The leading motor insurance companies in the UAE carry two layers of excesses that stack together under their comprehensive policies; they are:

Compulsory excess

Every insurance company decides its own compulsory motor insurance excess as per the company’s stipulated guidelines. Drivers have no control over this type of insurance excess, as there is no scope for negotiation; you cannot waive it, reduce it, or buy it out. The amount fixed as compulsory insurance excess usually depends on several factors, such as age, driving record, insurance claim history, etc.

Voluntary excess

As the name suggests, voluntary excess is the additional amount you choose to add on top of the compulsory excess. You can set the voluntary excess amount as per your budget and convenience. Most insurance companies usually provide the policyholders with a range for voluntary excess, and they can select the amount they see fit.

Your total excess at claim time is compulsory plus voluntary excess. For example, if the compulsory excess is AED 1500 and you add a voluntary excess of AED 500, then the total per claim is AED 2000. Both the excess layers apply every time you make a claim.

When do you need to pay for motor insurance excess?

One of the most common confusions that arises when raising a claim to cover damages is: Do I need to pay the motor insurance excess every time? No. You only need to pay the excess when your insurance provider covers your car’s repair expenses.. To help you understand more clearly, here’s a table:

Scenario	Do you need to pay the excess?
Any damage to the car caused by you or by anyone driving your car	Yes. In such cases, you are liable to pay the excess, after which the insurance company covers the rest of the repair cost.
Damage to the car by another driver	No. If another driver is at fault and you raise a claim on their third-party liability policy, rather than your own comprehensive policy, then your excess doesn’t apply.
Total loss or theft of the car	No. In case of total loss or theft of the car, the insurer deducts the excess from the settlement amount before paying you. For example, if the insured value is AED 70,000 and the excess is AED 2000, you will receive AED 68,000.
If a third-party insurer disputes fault or if your car needs a quick repair	Yes. You can claim on your own comprehensive policy first (by paying the excess) and then ask the insurance provider to pursue recovery from the at-fault insurer afterwards.

How much voluntary motor insurance excess should you choose?

Voluntary excess may lower your annual premium, but this fact alone shouldn’t cloud your judgment. Before selecting the amount of voluntary excess, ask yourself this: Will I be able to afford to pay this amount if I make a claim? Choosing a voluntary excess amount that you cannot afford defeats the purpose of seeking insurance coverage. Selecting a higher voluntary excess amount only makes financial sense when you can comfortably write a cheque for your total excess (i.e., compulsory plus voluntary excess) without creating real hardship.

Your driving environment matters as well; in urban, high-traffic areas, parking lot scratches and minor collisions happen frequently, meaning there are more chances for below-excess or near-excess claims than driving on the highway. Keeping a very high voluntary excess means you’re absorbing many of those small costs directly.

Final Thoughts

Understanding how the two layers of motor insurance excess work and when you’re liable to pay the excess can help avoid surprises when raising claims. If you’re seeking the best motor insurance company in Abu Dhabi, then The New India Assurance Company Limited is the ideal choice. Visit their website to know more about their motor insurance policies today!

Note: Procedures and requirements may vary from one insurer to another. It is always advisable to contact the insurance provider directly to understand their specific policies, processes, and terms.

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