The Saudi Central Bank announced the adoption of rules for Comprehensive Vehicle Insurance, which aim to regulate the contractual relationship between the insurance company and the insured by standardizing the minimum coverage for non-mandatory comprehensive vehicle insurance, and clarifying the provisions of the mandatory and optional coverages provided by the comprehensive insurance policy.
Optional Coverage for the Policyholder
The Central Bank clarified that, under the comprehensive motor insurance regulations, the insurance company is required during the negotiation phase to offer optional coverages to the policyholder, namely: coverage for the rental of a replacement vehicle, roadside assistance, death, and bodily injury, medical expenses for the insured or the driver, accidents occurring outside the territorial boundaries of the Kingdom of Saudi Arabia, and coverage for a driver who is a relative of the insured, the terms of which are specified upon selection of these additional coverages.
Provisions and Exceptions
The regulations also stipulate a number of provisions and exclusions, the most important of which are: determining the insured value by agreement between the contracting parties; the mechanism for applying the deductible; the determination of repair costs by the competent authorities in accordance with regulations in cases of partial total loss; the determination of technical total loss in accordance with the report of the competent authority as prescribed by law, in addition to allowing the insured and the company to agree on the percentage at which the vehicle is considered an economic total loss, and compensating the insured with a monetary amount based on the insured value, while emphasizing that when an insurance company offers insurance products that do not include comprehensive insurance provisions, it must not label these products as «comprehensive insurance» nor describe them as such, either explicitly or implicitly.
It should be noted that the Saudi Central Bank had previously made the draft “Comprehensive Motor Vehicle Insurance Rules” available to the public and experts for a period of 30 days, with the aim of soliciting their views and comments on the matter, These comments and observations were reviewed, and appropriate ones were incorporated before the final version of these rules was adopted. The Comprehensive Motor Vehicle Insurance Rules can be viewed by visiting the Saudi Central Bank’s website.
