The Saudi Central Bank (SAMA) announced the issuance of the Comprehensive Motor Insurance rules. These rules aim to regulate the contractual relationship between the insurer and the insured by standardizing the minimum coverage limit of the non-compulsory Comprehensive Motor Insurance and outline coverage provisions of the compulsory and optional coverage to be provided in the policy.
SAMA clarifies that these rules set an obligation on the insurer, during the negotiation stage and before issuing the policy, to state the following: the insurer shall offer the insured an insurance 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 state the provisions and exceptions, most importantly, calculating the sum insured based on an agreement between the insurer and the Insured, provisions 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 in the technical total loss as decided by the competent entity, as well as to allow a space for the insurer and the insured to agree on the percentage to consider the vehicle as an economic total loss, and compensate the insured based on the sum insured.
These rules also emphasize forbidding the naming or describing of any insurance products missing the defined comprehensive motor insurance provisions as Comprehensive Motor Insurance.
It is worth noting that SAMA had released earlier the draft of Comprehensive Motor Insurance Rules to the public and specialists for their feedbacks in a period of 30 days before adopting it in its final version.