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  • Issuance of Comprehensive Motor Insurance’s Rules - 06 11 2022

     

     

     

     

     

    The Saudi Central Bank issued these Rules under the Governor's Decision No. (1/S/444) dated 09/04/1444H, based on the powers vested to SAMA under the Cooperative Insurance Companies Control Law issued by Royal Decree No. (M/32) dated 02/06/1424H, and its Implementing Regulation issued by the Decision of the Minister of Finance No. (1/596) dated 01/03/1425H.

    • Article one Definitions

      The following words and phrases, wherever they occur herein, shall have the meanings assigned thereto, unless the context requires otherwise:

      1.1 SAMA: the Saudi Central Bank.
      1.2 Rules: the Comprehensive Motor Insurance Rules.
      1.3 Company: the insurance company licensed to practice insurance business in accordance with the provisions of the Cooperative Insurance Companies Control Law.
      1.4 Insured: a natural or juristic person who purchased the Policy from the Company and whose name is stated in the Policy Schedule.
      1.5 Comprehensive Motor Insurance: The insurance coverage that is based on damages and losses that occur to the Insured Motor Vehicle.
      1.6 Motor Vehicle: the Insured transportation means, which is designed to move by wheels or tracks or propelled using mechanical or animal power, as described in the Policy Schedule (trains are excluded).
      1.7 Policy: the Comprehensive Motor Insurance Policy whose provisions and coverages are stipulated herein and in the Policy Schedule attached thereto.
      1.8 Named Driver: the additional driver licensed to drive the Motor Vehicle and whose name is stated in the Policy Schedule.
      1.9 Technical Total Loss: the technically damaged Motor Vehicle, which cannot be repaired to a state legally Cannot be repaired to a state legally fit for driving and is sold for scrap, and is dropped from the registration systems of the General Department of Traffic.
      1.10 Economic Total Loss: the damaged Motor Vehicle that can be repaired, but the repair is economically costly; based on the percentage agreed upon between the Company and the Insured and stated in the Policy Schedule.
      1.11 Partial Loss: the destruction or damage of parts of the Motor Vehicle which does not exceed the set percentage of Economic Total Loss agreed on between the Company and the Insured which is stated in the Policy Schedule.
      1.12 Policy Schedule: the schedule complementing the Policy and its appendix, attached to this Rules. 
      1.13 Deductible: the amount borne by the Insured for any claim as stipulated in the Policy Schedule.
      1.14 Sum Insured: the value of the Motor Vehicle, set in the Policy Schedule.
      1.15 Roadside Assistance: a set of various services provided for the Insured, other than towing and storage, when the Motor Vehicle breaks down for any reason.
      1.16 Material Fact: any information requested by the Company from the insurance applicant during the conclusion of the Policy that may affect the Company's decision in accepting the insurance or rejecting it or accepting the insurance with different conditions.
      1.17 Repairing Party: the approved agency (manufacturer or importer) to repair the damages covered under the Policy, or the auto repair shop approved by the Company to repair the damages covered under the Policy, which is stated in the Policy Schedule.

       

       

    • Article Two Purpose and scope

       

      2.1 The Rules aim to regulate the contractual relationship between the Company and the Insured by sitting the minimum coverage of the non-compulsory Comprehensive Motor Insurance.
      2.2 The Rules apply to any non-compulsory Comprehensive Motor Insurance. The Rules must be adhered to in conjunction with the Cooperative Insurance Companies Control Law and its Implementing Regulation, the Unified Compulsory Motor Insurance Policy, and the relevant regulations, rules and instructions.

       

       

    • Article Three Insurance Coverage

      3.1 Under the Policy, the Company shall compensate the Insured for any risk causing damage or loss to the Motor Vehicle, The coverage shall also include any damage caused by fire, theft, lightning or natural disasters such as floods and hail, along with vehicle towing and storage coverage. It also covers third-party civil liability as per the Unified Compulsory Motor Insurance Policy issued by SAMA.
      3.2 The maximum limit of the insurance coverage for each covered claim under the Policy should be as follows:
        1.Limits of civil liability to third party as per the Unified Compulsory Motor Insurance Policy.
        2.Sum Insured of the Motor Vehicle for any risk causing damage or Loss to the Motor Vehicle.
        3.Limit of liabilities for other optional insurance coverage stated in the Policy Schedule.
      3.3 Optional Insurance coverage:
        1.During the negotiation stage and before issuing the Policy, the Company must offer the insurance applicant an insurance coverages for the following:
          A. Replacement of Motor Vehicles’ rent.
          B. Roadside Assistance.
          C. Death and physical injuries’ and medical expenses for the Insured or Named Driver.
          D. Accidents occurring outside the territory of the Kingdom of Saudi Arabia.
          E. The driver related to the Insured, such as (parents, spouse, sons, daughters, brother and sister) or the Insured’s domestic worker or someone who work for the Insured based on a labor law.
        2.The Company may offer add-ons insurance coverage to the insurance applicant other than coverages stated herein.

    • Article Four Products with Lower insurance coverage

      When offering insurance products that include third party insurance and additional coverage the Company must obey the following: 

      1. Not to name the insurance products or describe it in any way as Comprehensive Motor Insurance.
      2. Comply with the provisions of Article five section (4,5,6) in this Rules.
      3. In case the insurance coverage includes the provision of applying the deductible on the indemnity due to the use or consumption of the Motor Vehicle during the period prior to the risk, the percentage shall be agreed on with the Insured upon concluding the policy and stated in the Policy Schedule.

    • Article Five Insurance Coverage Provisions

      5.1 Motor Sum Insured:

      The Sum Insured shall be agreed between the Company and the Insured and stated in the Policy Schedule, provided that the Company adopts sound methods to determine a fair value of the Sum Insured.

      5.2 Indemnity mechanism:

      1. The Insured must inform the Company of the damage or loss to the Motor Vehicle, associated with a risk covered under the Policy.
      2. The Company shall receive the Motor Vehicle from the Insured upon the incident of the accident, and deliver the Motor Vehicle to the competent entity in charge of automobile damage appraisal, and then deliver the Motor Vehicle to the Repairing Party specified in the Policy Schedule as per the terms and conditions of the Policy, or compensate the Insured with the Sum Insured in case of Technical Total Loss, or Economic Total Loss.
      3. The Insured must inform the Company if the damage or loss associated with a risk covered under the Policy was caused by a third party. In this case, the Company shall first compensate the Insured based on the indemnity mechanism stated in article (5) section (5.2) sup-section (2) and then subrogate the Insured against the third party in accordance with Article (8) hereof.

      5.3 Indemnity Value:

      1. Partial Loss: in case of Partial Loss the indemnity shall be to bear the cost of repair at the Repairing Party as specified by the Insured and stated in the Policy Schedule; whereas the repair costs shall be determined by the competent entity in charge of automobile damage appraisal.
      2. Technical Total Loss: In case of Technical Total Loss the indemnity shall be the amount of the Sum Insured based on the report of the competent entity in charge of automobile damage appraisal, without deducting any expenses incurred by the Company.
      3. Economic Total Loss: When the Motor Vehicle is considered Economically Total Loss, based on the report of the competent entity in charge of automobile damage appraisal; the Insured shall be compensated with the amount of the Sum Insured, without deducting any expenses incurred by the Company. The Company shall notify the Insured when offering the Motor Vehicle for sale, and the Company and the Insured may agree on a different method to deal with Motor Vehicle when considered an Economic Total Loss.
      4. The Company shall not deduct an amount from the indemnity due to the Insured's use or consumption of the Motor Vehicle during the period prior to the risk, in case of Partial or Total Economic/ Technical Loss.

      5.4 Deductible:

      1. The Deductible shall be determined by the Insured in agreement with the Company and stated in the Policy Schedule.
      2. The Company's liability shall starts after deducting the amount of the Deductible, this only applies to damage or loss to the Motor Vehicle and shall not apply to claims arising from third-party civil liability coverage.
      3. If the Insured or the Named Driver is held partially liable for the accident, the Deductible shall be calculated in proportion to the percentage of liability assigned to the Insured or the Named Driver regarding the accident only.
      4. The Deductible shall not be charged if the Insured or the Named Driver is not held liable for the accident; according to the report of the competent body attending the accident scene.
      5. The Company may obligate the Insured to pay the Deductible If there is no other party to the accident and the Insured or the Named Driver held responsible for the accident; based on the report of the competent body attending the accident scene , or The acknowledgement of the Insured or the Named Driver of the liability for the accident.
      6. The Deductible shall apply for each accident only; even if there are multiple claims resulting from the same accident.
      7. The amount of the Deductible shall be fixed during the Policy period, and the Company shall not require a different amount irrespective to the accident type or the indemnity value.

      5.5 Vehicle Towing and Storage:

      1. The Company shall pay the expenses incurred by the Insured for towing the damaged Motor Vehicle - determined in Policy Schedule-; due to an accident covered under the Policy, to a secure location, or the competent entity in charge of automobile damage appraisal. When filing the claim, the Insured shall provide the Company with proof of the incurred expenses arising from the Motor Vehicle towing and storage.
      2. This coverage shall include the expenses that the Company incurred for towing and storage of the Motor Vehicle from and to the competent entity in charge of automobile damage appraisal.

      5.6 Replacement of Motor Vehicle:

      In case the coverage of compensating the Insured for renting a Motor Vehicle Replacement is added, the Insured must obtain the Company's prior approval for renting the car, and shall provide a proof of renting a Motor Vehicle Replacement for the period agreed upon on the Policy Schedule.

      The indemnity shall be in accordance with the maximum indemnity value stated in the Policy Schedule, and the indemnity period shall start from the date of delivering the Motor Vehicle to the Repairing Party.

      5.7 Death and Physical Injuries and Medical Expenses for the Insured or Named Driver

      If the Insured chooses to include death and physical injuries and medical expenses for the Insured or the Named Driver coverage, the Company shall compensate in accordance with the table of benefits stated in the Policy Schedule.

    • Article Six Third-Party Civil Liability Coverage

      Coverage limits in this section are subject to the Unified Compulsory Motor Insurance Policy issued by SAMA.

    • Article Seven Exclusions

      The following are excluded from the coverage of the Policy:

      1. The optional Insurance coverages that must be offered by the Company to the insurance applicant as stated in Paragraph (3.3) of this Rules if rejected by Insured.
      2. A Motor Vehicle found to be driven by a person who does not hold a proper class of license corresponding to the type of vehicle driven; according to the relevant laws and regulations, or in the event that an order was issued by a competent authority for the forfeiture of the Driver's license, or if the license was expired at the time of the accident unless it is renewed within (50) business days from the date of the accident.
      3. If the Indemnity was less than or equal to the Deductible stated in the Policy Schedule.
      4. An accident to the Motor Vehicle when driven by a person other than the Insured or Named Driver.
      5. Manufacturing defects and damage resulting from the use of the Motor Vehicle or from mechanical or electrical malfunctions.
      6. Damage, loss or theft of tires, rims, hubcaps (wheel covers) and/or exterior mirrors, unless such loss or damage occurred thereto at the time of the covered accident.
      7. Loss or damage to goods and/or personal belongings while being loaded, unloaded or transported in or on the Motor Vehicle.
      8. Loss or damage to any trailer, unless stated otherwise in the Policy Schedule.
      9. Loss or damage to the Motor Vehicle as a result of theft or attempted theft due to leaving the Motor Vehicle running or leaving the keys in the Motor Vehicle, or due to not rolling up the windows or locking the doors.
      10. All additional Motor Vehicle accessories, apart from those already fitted by the manufacturer and whose price is already included in the original value of the Motor Vehicle, or the type and value of such accessories are explicitly and specifically stated in the Policy.
      11. If the Motor Vehicle is being used in a way that violates the restrictions of the vehicle use set forth in the Policy.
      12. The Motor Vehicle carrying passengers beyond its permitted seating capacity or that was overloaded and proven that the accident was caused by such violation.
      13. If the Motor Vehicle is used for any type of racing, speed trial, or speed or power testing, with the exclusion of the juristic Insured.
      14. If the Motor Vehicle is driven by a person under the influence of drugs, alcohol, or medicines that affect the ability to drive.
      15. If the Motor Vehicle is being used as working machinery.
      16. Car drifting, running a red light or driving against the direction of traffic if it is proven that such violation was the cause of the accident according to the report prepared by the competent body attending the accident scene.
      17.  If the Motor Vehicle is used in areas that are normally off limits to the public, such as airports or seaports.
      18. Any liabilities or costs that are directly or indirectly incurred due to criminal and hostile acts committed by the Insured and/or the Named Driver.
      19. If it is proven in the report prepared by the competent body attending the accident scene that the accident was caused deliberately by the Insured or the Named Driver.

      20. Any liability or expenses arising, directly or indirectly, from the following:

        a. War, invasion, acts of foreign enemy, hostilities, warlike acts (whether war is declared or not), or civil war.
        b. Rebellion, military or popular uprising, insurgence, revolution, usurping authority, martial laws, siege, or any events or reasons leading to declaration or continuation of martial laws, siege, or acts of vandalism and terrorism committed by person(s) working individually, on behalf of, or in relation with any terrorist organization. Terrorism means using violence for political, intellectual, philosophical, racial, ethnic, social, or religious purposes. Such use of violence includes putting the public and/or a segment thereof under a state of terror; causing turmoil; affecting and/or intervening in any of the government's operations, activities and/or policies; causing any disturbance that negatively affects the national economy or any of its sectors; and/or carrying out or causing strikes, riots, or civil or labor unrest.
        c. Damage directly or indirectly caused by nuclear weapons, ionizing radiation, or radioactive contamination resulting from any nuclear fuel or waste, or contamination due to nuclear fuel combustion. For the purposes of this exclusion, combustion shall include any nuclear fission.

         

      21. Driving the Motor Vehicle in desert areas and unpaved roads unless inside the city.

    • Article Eight Subrogation

      In the event that a party other than the Insured or the Named Driver caused the damage or loss to the Motor Vehicle, and the Company compensated the Insured for this damage or loss or for death and physical injuries and medical expenses -if covered-, the Company has the right to subrogate the Insured and pursue the party causing the accident, or the Company of the party causing the accident for the indemnity incurred on the Motor Vehicle.

    • Article Nine Change in Material Fact

      The Insured shall notify the Company, within (20) business days, of any change in the Material Fact. The Company shall advise the Insured if it intends to increase the premium rate. If no notification is sent to the Insured by the Company within (5) business days, this shall indicate the Company's agreement to continue providing the coverage for the Insured at the premium rate agreed on.

    • Article Ten Cancellation

       

      10.1 

      The Insured or the Company may not cancel the Policy, except in the following cases:

      1. Existence of a valid third-party liability insurance policy or a Comprehensive Insurance Policy.
      2. Cancellation of the Motor Vehicle's registration.
      3. Transfer of ownership of the Motor Vehicle to another owner.
      10.2 The Company shall refund to the Insured the due amount by crediting the amount to the Insured’s bank account via IBAN, within three business days from the date on which the Company become aware of the occurrence of any of the cases mentioned above.
      10.3 

      The return premium payable to the Insured is calculated by subtracting the elapsed days from the total Policy’s term (in days) and then dividing the result by the total Policy’s term (in days). The result is then multiplied by the insurance premium less commission, and administrative fees (a maximum of SAR 30) in order to determine the return premium payable to the Insured minus the value of claims. To be as shown below:

      (365 − elapsed days) /365 × (insurance premium- commission less administrative fees (a maximum of SAR 30) – value of claim) = return premium.
      10.4 The Company is exempted from its obligation to pay the return premium in case of a claim — related to the Policy to be cancelled and the Motor Vehicle— with a value exceeds the amount to be refunded as per the calculation formula mentioned above. Notwithstanding the foregoing, the Company, Insured and Named Driver shall remain bound by the provisions of the Policy with respect to the obligations arising prior to its cancellation.

       

    • Policy Schedule Comprehensive Motor Insurance Policy

      Information of the Insured and the Named Driver

      Policy No :
      National ID number for Saudi nationals/ Residence permit (Iqama) number for resident individuals /Commercial Registration No :
      Name of the Insured:
      Named Drivers:
      National ID number:
      Driver license type:
      Gender:
      Age:
      Marital status:
      Occupation:
      Phone Number:
      National Address:
      Sum Insured:
      Premium amount with VAT:
      Premium amount without VAT:
      Period of coverage:

      Percentage to consider the Motor Vehicle an Economic Total Loss:

      * The Motor Vehicle will be considered Economic Total Loss if the repair cost exceeds the above percentage based on the Sum Insured.

      Repairing Party: (approved agency or auto repair shops)
      Vehicle towing and storage: Coverage: (500 inside the city and (1000) outside the city for each claim. Parties may agree upon an amount exceeding the Coverage amount for the vehicle and towing storage coverage.
      Optional insurance coverages that must be offered by the Company to the insurance applicant:
      Replacement Motor Vehicle rental Replacement Motor Vehicle rental period: Maximum Replacement Motor Vehicle rental amount per day:
      Death and physical injuries and Medical expenses for the Insured or Named Driver.
      Roadside Assistance
      Coverage for accidents occurring outside the territory of the Kingdom of Saudi Arabia.
      The driver related to the Insured, such as (parents, spouse, sons, daughters, brother and sister) or the Insured’s domestic worker or someone who work for the Insured based on a labor law.
      Additional coverage:
      Minimum limit for Death and physical injuries and Medical expenses for the Insured or Named Driver:

      Type of Benefit

      Amount in Saudi Riyals

      death100,000
      Permanent disablement from attending any employment or occupation whatsoever100,000
      Total loss by physical severance at or above the wrist or ankle of both hands or both feet100,000
      Total loss by physical severance at or above the wrist or ankle of one hand or one foot50,000
      Permanent total loss of sight in both eyes100,000
      Permanent total loss of sight in one eye50,000
      Reimbursement of Expenses in respect of medical and surgical treatment25,000
      *Parties may agree on limit of indemnification higher than stated above or additional types of coverage

      Motor Vehicle information

      Chassis No. Registration Plate No. 
      Vehicle Registration Expiry Date Vehicle Color 
      Customs Card No. Type of Chassis 
      Year of Manufacture Vehicle Make 
      Use Restraints Vehicle Model 
      Parking location at night Serial Number 
      Purpose of use transmission (automatic/Manual) 
      Motor Vehicle Modification   

      Disclosure

      Trailer attached to the Motor Vehicle
      Using the Motor Vehicle for any type of racing, speed trial, or speed or power testing
      Other Requested Martial Facts by the Company