The Saudi Arabian Monetary Authority (SAMA) has released a draft regulatory framework for comprehensive vehicle insurance that aims to regulate the contractual relationship between the insured and insurance companies.
SAMA says the draft framework, when approved, would guarantee the minimum basic insurance coverage and set out a number of provisions and exceptions, the most important of which relate to the depreciation amount for partial and total loss; the determination of the insurance value by agreement between the contracting parties, and the mechanism for applying the deductible amount, in addition to the maximum indemnity amount, roadside assistance, and the replacement vehicle, etc.
Further to requiring insurers to offer additional coverage to the insurance applicant, namely (coverage of death, bodily injury, medical expenses for the insured or driver, and accidents that occur outside the territorial borders of the kingdom), the draft framework would permit the insured and insurance companies to agree to increased coverage.
The insurance coverage would include any incident that causes damage or accidental loss of the vehicle, burning or theft, or damage resulting from lightning or natural disasters such as floods, hail, rental of an alternative vehicle and cost of roadside assistance, in addition to third party liability.
SAMA is currently seeking public feedback on the draft framework.