Sold your car? Leaving the UAE? You can cancel car insurance and claim part of your premium back. Most drivers never ask, so the money simply stays with the insurer.
Here is what almost nobody tells you. The refund is not up to your insurer. The Central Bank of the UAE sets the exact percentages in a published table. So you can work out your refund before you even call.
This guide gives you that table, the notice period you must give, and the one condition that can cancel your refund completely.
When Can You Cancel Car Insurance in the UAE?
You can cancel during the policy year. However, you must give your insurer seven days written notice. Email, fax, hand delivery or registered letter all count.
You Sold or Transferred the Car
This is the most common reason. Once the buyer takes ownership, your policy no longer covers your risk. So you either cancel for a refund, or move the policy to your new car. Generally the transfer is better, because your cover never breaks.
You Are Leaving the UAE
Here you cancel from the date the car leaves the register. Therefore you will need the export paper or the cancelled registration as proof.
Your Car Was a Total Loss
The policy ends automatically in a total loss. However, this needs the registration deleted and a report from the traffic department confirming the car is unroadworthy. Then your insurer pays the claim under the policy.
How Much Refund Will You Get?
This is the part worth reading twice. Your refund follows the official Short Rate Schedule, not a simple half-and-half split. The longer you keep the policy, the less comes back.
| How long the policy has run | Premium you get back |
|---|---|
| Up to 1 month | 80% |
| 1 to 4 months | 70% |
| 4 to 6 months | 50% |
| 6 to 10 months | 30% |
| Over 10 months | Nothing |
Source: Schedule No. (4), CBUAE Rulebook.
Notice the shape of it. At six months you still recover half. But once you pass ten months, the refund drops to zero. Therefore timing matters far more than most people realise.
The Claim Rule That Cancels Your Refund
Now the condition that catches people out. You lose the refund if a claim was paid, or if a claim is still pending, and you caused the accident. The same applies where an unknown person caused the damage.
So read that carefully. The bar is tied to fault, not simply to the existence of a claim. If another driver caused the accident and the police report names them, your position is different. Therefore always ask your insurer to state the reason in writing before you accept a refusal.
Either way, check your claim history first. If you caused an accident this year, cancelling early gains you nothing. Worse, it leaves you with no cover at all.
If Your Insurer Cancels Instead
The rules change here, and they favour you. Your insurer can only cancel on serious grounds. Also, they must give you thirty days written notice and inform the regulator of the reason.
Most importantly, the refund is then pro-rata. In other words, you get back the full unused share of your premium, with no short-rate deduction at all.
So if your insurer offers you a short-rate refund on a cancellation they started, question it. You can read the wording yourself in Chapter Six of the unified policy.
Documents You Will Need
- A written cancellation request signed by the policyholder. A driver or a relative cannot sign it.
- Emirates ID copy of the policyholder.
- The policy document or the policy number.
- Proof of your reason. For example, the new Mulkiya, the export paper, or the deregistration slip.
- Bank details in the policyholder’s own name.
In Dubai, the RTA handles vehicle transfer and registration. Other emirates run their own traffic departments. Finish the transfer first. Otherwise your insurer will simply hold the request.
Step by Step: How to Cancel Car Insurance
- Check your claim history. If you caused an accident this year, stop and reconsider.
- Work out your refund from the table above, so you know what to expect.
- Transfer or deregister the car and collect the proof.
- Send written notice at least seven days before your chosen end date.
- Ask for the calculation in writing before you sign anything.
- Confirm the end date and make sure your new policy starts on or before it.
- Request your No Claims Certificate at the same time. It costs nothing to ask.
Mistakes to Avoid
First, do not cancel before your new policy starts. Driving without cover brings fines, black points and possible impounding.
Second, do not forget the seven days notice. Insurers can hold you to it.
Third, do not wait past ten months. After that your refund is nil, so you may as well run the policy out.
Finally, do not cancel when you could transfer. If you are only changing cars, a transfer keeps everything running.
Frequently Asked Questions
How do I cancel car insurance in the UAE?
Send your insurer written notice at least seven days before your end date. Include your Emirates ID, the policy details and proof of your reason.
How much money will I get back?
It follows the official short rate table. For example, you recover 70% if the policy has run one to four months, and 50% between four and six months.
Can I get a refund after ten months?
No. Once the policy has run more than ten months, the recoverable premium is nil.
Will a claim stop my refund?
It can. You lose the refund where a claim was paid or is pending and you caused the accident, or where an unknown person caused the damage.
What if my insurer cancels the policy?
Then they must give thirty days notice and refund you pro-rata. So you recover the full unused share, without the short rate deduction.
Can I transfer my policy to a new car instead?
Yes, and it is often smarter. Your insurer moves the policy across and adjusts the premium, so your cover never breaks.
Who can request the cancellation?
Only the policyholder named on the policy. A driver or a relative cannot cancel without written authorisation.
Related guides: car insurance renewal UAE
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Read next: our full guide to car insurance in Dubai and the UAE, or car insurance excess explained.
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Figures above come from the Unified Motor Vehicle Insurance Policy Against Loss and Damage (Insurance Authority Board Decision No. 25 of 2016), maintained by the Central Bank of the UAE. Always check your own policy schedule. GS Insurance Services works as a sales intermediary; a licensed UAE insurer issues every policy we arrange. This article is general information, not advice on a specific policy.
