Why Choose Multi-Year Fixed Auto Insurance?

Why Are More People Choosing Multi-Year Fixed Auto Insurance?

Residents of the United Arab Emirates (UAE) are becoming increasingly conscious of their financial decisions, especially due to the rising costs of auto insurance premiums. A recent survey indicates that nearly 76 percent of UAE inhabitants are particularly interested in multi-year, fixed premium auto insurance plans to protect themselves from future hikes in premiums. Several factors contribute to this trend, including rising repair costs, insurance companies' profit goals, inflation, and an increasing number of claims.

What Causes the Price Increase?

Since April 2024, auto insurance premiums have risen by double digits in the UAE, significantly impacting consumers' spending habits. The unprecedented rainfall in March and April also played a part in this, with thousands of vehicles suffering flood damage, leading insurers to pay out more than usual, thus justifying the rise in premiums.

An online survey conducted in March 2025 involving 300 vehicle owners revealed that over 80 percent of them expect further premium hikes. Half of those surveyed have already experienced increases in their insurance premiums.

Why Are Multi-Year Fixed Plans Popular?

The main advantage of multi-year plans is predictability. With prices fluctuating more frequently, many prefer to "insure" themselves in advance against future price hikes. This is especially important in an economic climate where the effects of inflation are still felt in household budgets. Residents prefer products and services that offer long-term stability.

Loyalty Programs and Discounts

The survey shows that about 70 percent of car owners actively use loyalty programs, no-claim bonuses, and reduced coverage insurance to mitigate rising living costs. These tools have become particularly important recently, as wage increases have not kept pace with price rises for many.

Financial Planning and Adaptation

Surveys indicate that UAE residents are reevaluating the concept of "value for money." It's no longer just about the price: durability, reliability, and long-term benefits are coming to the forefront of consumer decisions. Another study concerning workplaces suggests a significant portion of employees is considering changing jobs as living expenses rise faster than wages.

Conclusion

The developments in the insurance market reflect people's attitudes toward inflation and economic uncertainty. Multi-year fixed auto insurance is not just a financial product but a conscious step toward making the future predictable. As UAE residents increasingly prioritize foresight and long-term values, finding stability-offering solutions becomes more crucial in everyday life.

(The article is based on a report by the NIQ global market research company.)