Saudi Arabia: Najm upgrades NCD service to offer discounts of up to 60% on motor premiums
Source: Middle East Insurance Review | Apr 2023
Najm Insurance Services Company, in cooperation with the Insurance Supervision Department at the Central Bank of Saudi Arabia (SAMA), has upgraded the no-claims discount (NCD) eligibility service.
The upgraded service aims to further motivate vehicle owners to commit to renewing their motor insurance policy before it expires and also to avoid traffic accidents, according to a statement issued by Najm.
A clean claims-free record entitles drivers to receive discounts on motor insurance premiums of up to 60%. The greater the number of years a driver maintains a motor insurance policy without interruption and without claims, the higher the discount rate he or she is eligible for. Conversely, when a motor insurance policy is not renewed, the eligibility discount is based on the number of days of discontinuation of the policy.
Eligibility framework
The updated NCD service offers an eligibility framework that takes into consideration claim-free records and the period of time that a vehicle’s motor policy is discontinued. The framework is as follows:
- Duration of lapse
- If the lapse in insurance coverage is less than 30 days after the expiry of the motor policy, the policyholder’s right to discount will be maintained when purchasing a new policy.
- If the lapse is between 30-180 days after the expiry of the policy, the policyholder will temporarily lose the discount for one year and will be able to claim the NCD once the vehicle is insured again the next year.
- If the lapse last more than 180 days after the expiry of the motor insurance policy, the policyholder loses the NCD for all vehicles in his fleet.
- If an insurance claim has been lodged under an auto policy, the NCD eligibility on all vehicles will be affected and the right to discount will be reduced by two years.
- If a policyholder is eligible for the NCD, this eligibility can be transferred to a newly purchased vehicle.
Najm is the agency that determines the applicable discount rate for the insured through its website or app, in accordance with the terms and conditions issued by SAMA. The overall goal is to deepen the role of the insurance sector in raising the vehicle insurance penetration rate and awareness of the importance of traffic safety among drivers. M