Saudi Arabian Monetary Authority (SAMA) has announced the issuance of an update to the unified policy for compulsory vehicle insurance, which is due to commence on 15/12 / 1439H corresponding to 26/08/2018. One of the most prominent amendments to the document is that, in contrary to previous practice, now it covers the driver aged 18 years and above and holds a driver’s license. Additionally, an obligation is imposed on the insurance company to deposit the amount of compensation after claim settlement through the bank account of the beneficiary directly into the International Bank Account Number (IBAN). The amendments of the document included also the organization of the claims receipt based on enforceable judicial judgment so they can be provided by the natural person or by his/her legal representative or the legal representative of the legal person who are injured by non-exceptional risks in the policy. The document also systematized the settlement of the damaged vehicle that had repaired already before the claim is submitted. In such cases, the claimant must provide the company with proper invoices of the reparation, on the condition that the accident must be handled directly by an authorized party and to provide the company with an evaluation report of the vehicle’s damage after the accident and before the repairmen report issued by the licensed party.
According to the updated document, the period of notice to the insurance company that the insured is obligated to in case of any substantial change; changes that may increase the likelihood of danger, has been increased from 10 to 20 working-days. In return, the insurance company must notify the insured if it wished to add additional charges to the subscription, fees or return part of it in case of prices reduction. Unlike before, the document now covers the insured or the driver who caused an accident even if his/her license is expired; this is applicable only if it is renewed within 50 working days. Moreover, it is now possible for the insured or the insurance company to cancel an insurance document after its issuance if there is an alternative insurance covering the remaining period of the document to be canceled.
According to the updated document, the mechanism of calculating the amount to be return to the insured upon cancelation of the document has been amended to be estimated based on wasted days, taking into account the deduction of administrative fees maximum 25 Riyals. The insurance company shall not be required to pay the remaining subscription fees in case of ongoing claim related to the document to be canceled and on the very same vehicle that exceeds the value of the amount to be returned. The document granted the insured the right to lodge a complaint through SAMA website www.samacares.sa instead of going directly to Resolution of Insurance Disputes and Validation Committees (IDC) whenever the insurance company fails to settle a claim during the statutory period without a valid reason. In addition, the limitation period of the claim issued by the insurance policy increased from three to five years. Nonetheless, the insurance company has been given the right to recourse meaning that the company can refer to the insured or the person causing the accident to recover its compensation payments to others if the vehicle is stolen or forcibly taken and he/she fails to notify the authorized parties of the theft.
According to the updated document, some recourse cases moved to the exceptional ones. Recourse cases are specific risks where are the insurance company is obligated to cover and has the right to collect its payment to others. On the contrary, exceptional cases are risks, which are not covered by the insurance company, and the accident causer is obligated to compensate the wronged party. Some of the new updated exceptional cases are drifting, determine the starting speed, horsepower testing or if the car is used in restricted areas as in airports, harbors unless if the vehicle is meant for commercial purposes within legal domains. Likewise if the insured or the driver claims his/her responsibility for the accident unlawfully with the intention to harm the company or if the insured colluded with others to fabricate an accident or if the vehicle is used as a machinery. The updated document has prohibited the agreement of the insurance company and the insured to reduce the limit of liability, which determined the minimum limit to covering civil liability to third parties in accordance with terms, conditions and exceptions stated therein.