Saudi Arabia: Insurers slap higher motor rates on rental cars
Source: Middle East Insurance Review | Mar 2019
Insurers in Saudi Arabia have increased their rates for the coverage of rental cars by more than 75%, depending on the type of the car.
The higher insurance premiums are cited as one of several reasons for 60% of investors having left the vehicle rental market in the past year.
Insurers hiked compulsory motor third party liability premiums fourfold from an average of SAR1,000 ($267) to SAR4,000, according to a report in the newspaper Al Watan.
Mr Saeed Al Bassami, head of the national transport committee at the Council of The Saudi Chambers of Commerce & Industry and chairman of the transport committee of the Jeddah Chamber of Commerce, told Al Watan that the insurers raised their prices because of the risks they face and losses suffered. For these reasons, some insurers have refused to provide comprehensive coverage for rental cars and taxis.
This means only a few insurers are operating in the rental car market and that they could control prices. The car rental market is not open to insurers from other GCC states.
Mr Al Bassami said that furthermore, car rental companies are facing severe competition as some dealers agree to sell their cars without asking for a down payment. M
SAR1 = $0.27