Saudi Arabia: Nat CAT cover to be included in motor comprehensive insurance policies
Source: Middle East Insurance Review | Jan 2018
The Saudi Arabian Monetary Authority (SAMA) is making it mandatory for insurers to include coverage against natural disasters for vehicles in their motor comprehensive policies, especially against damage caused by floods, rain, and cold weather.
Mr Hesham Tashkandi, Director General of the Insurance Control Department at SAMA, issued a circular in which he stressed that all insurers must modify their products to comply with the requirement for comprehensive coverage to include natural disasters.
The new mandatory requirement is expected to be implemented in 2018, reported Al Madina.
In a related context, advisers and experts in the insurance sector said that claims made by customers as a result of the heavy rain that hit Jeddah in November 2017 may not exceed SAR200 million (US$53.3 million).
An insurance advisor said that the expected compensation to be borne by insurers for damaged vehicles and property would be between SAR150-250 million, especially with the flooding of warehouses belonging to a local car dealer and the damage to stocks of new cars.
Flooding occurs almost every year in Jeddah, where residents have long criticised poor infrastructure.
Another expert in the insurance sector said that the total compensation from the floods will range from SAR100-200 million, of which at least half will go to vehicle owners. M
SAR1 = US$0.27