Saudi Arabia: SAMA issues comprehensive motor insurance rules
Source: Middle East Insurance Review | Dec 2022
The Saudi Central Bank (SAMA) has released the Comprehensive Motor Insurance Rules aimed at regulating the contractual relationship between the insurer and the insured.
Among the various provisions, the rules standardise the minimum coverage limit of the non-compulsory comprehensive motor insurance and outline the compulsory and optional coverage to be provided in the policy.
SAMA clarifies that the rules place obligations on the insurer, during the negotiation stage and before issuing the insurance policy, to state the following: the insurer shall offer, to the insured, coverage for an alternative rental vehicle, roadside assistance, death and physical injuries, medical expenses for the insured or driver, accidents occurring outside the territorial borders of Saudi Arabia and coverage of the related drivers.
In addition, these rules spell out the provisions and exceptions related to the insurance coverage, most importantly, calculating the sum insured based on an agreement between the insurer and the insured, the method of applying the deductible amount, determining the repair cost by the competent entity in charge of automobile damage appraisal in case of partial loss and declaring technical total loss as decided by the competent entity, as well as to allow space for the insurer and the insured to agree on the percentage to consider the vehicle as an economic total loss, and to compensate the insured based on the sum insured.
The rules forbid the naming or describing of any insurance products that lack the stipulated comprehensive motor insurance provisions as ‘comprehensive motor insurance’.
The rules were released following a public consultation period on a draft. M