Anew car insurance move in the UAE is set to enable companies to charge fairer premiums and prevent insurance fraud, The National reported, adding that about 60% of motor insurance companies in the country will soon have access to a shared database to track drivers’ accident histories.

Cars in the UAE are considered inexpensive by world standards. Moreover, the cost of mechanics is generally reasonable, while the cost of petrol is much lower than the global average. The cost of car insurance in the UAE, however, is higher than average. Moreover there is no reference to sharing drivers’ histories, which inhibits insurance firms from setting effective premiums.

The new system means safe drivers will be rewarded while reckless ones will be penalised with higher premiums, which is similar to what happens in many other countries.

Premiums in the UAE are mainly based on the value of the car rather than being balanced against the driver’s record, according to The National.

The new move should have a wider effect rather than merely on bank balances; evidence elsewhere in the world suggests that when drivers know that their insurance premiums will reflect the way they drive, it prompts them to be more careful, resulting in fewer road casualties, and therefore fewer medical expenses and compensation.