Kuwait’s Insurance Regulatory Unit (IRU) has announced a significant increase in annual insurance premiums for compulsory motor third-party liability insurance for privately-owned vehicles.
The IRU’s supreme committee stipulated that from 16 April 2023, the mandatory insurance premium for privately-owned vehicles and those owned by entities will increase to KWD53 ($173), up from KWD19. The value of the annual basic insurance premium for private vehicles will also increase to KWD32, according to media reports.
The new rates were approved by the committee, in collaboration with the Ministry of Interior and insurance and brokerage companies, following the development of an integrated online vehicle registration system.
The new system requires qualified insurance companies and brokers to issue a unified insurance policy, and it is not permissible to amend the form of the unified insurance policy or add any appendices to it, unless the terms are in favour of the insured or the beneficiary.
The committee also stipulated motor insurance tariffs for taxis, passenger transport vehicles, goods vehicles, trucks, construction vehicles and motorcycles.
Kuwaiti insurance companies may issue the unified insurance policy for non-Kuwaiti vehicles in the country, according to the price tariffs specified in the committee’s decision, provided that the period of insurance coverage for this policy does not exceed one year.
Compensation
The committee has also set the period for receiving compensation to be within a maximum of 10 working days from the date of completion of submission of the insurance claim.
As for depreciation, the committee states that the rate is to be 0-10% for the first year, 10% to 20% for the second year, 20% to 30% for the third year, and 30% to 40% for the fourth year and 50% for the fifth year and beyond.
The decision stipulated the insurer’s obligation to compensate policyholders for repairs to damaged vehicle according to an assessment issued by suitable repair workshops and approved by the insurer according to the conditions and controls specified by the IRU, unless the damaged vehicle is considered beyond repair or if its repair jeopardises the safe use of the vehicle. The insurer is obligated to replace the damaged parts with new original ones or of the same equivalent in the event that the parts from the original manufacturer are not available.
The committee also sets out 16 situations in which the insurer has the right to claim against the insured, the driver or the person responsible for the accident, as the case may be, within the limits of the amount of compensation paid. These situations include false statements or concealment of material facts that would affect the insurer’s acceptance of risk coverage, and if the vehicle was used for purposes other than those stipulated in the policy schedule. M