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What is included in the comprehensive insurance rules

What is included in the comprehensive insurance rules

What is included in the comprehensive insurance rules

What is included in the comprehensive insurance rules

What is a comprehensive insurance policy and what should it include?

Unlike third party insurance, comprehensive car insurance is not compulsory in the Saudi traffic system. Comprehensive insurance covers damages related to the car itself and damages caused by the car to third parties (persons and property); Where the insurance company will pay all the costs of repairing your car, repairing and compensating the damages to the other parties for which you were responsible.

According to the rules, the coverage of a comprehensive insurance policy must include the following:

  • Accidental accidents
  • Fire and theft
  • Damage resulting from natural disasters such as lightning, floods and hail.
  • Preservation and transportation costs
  • Replacement vehicle rental coverage
  • Roadside assistance
  • Coverage of civil liability towards third parties

What is the purpose of adopting comprehensive insurance rules?

The Comprehensive Insurance Rules seek to standardize comprehensive insurance policies and set a minimum level of coverage for all insurance companies in Saudi Arabia. Previously, there was no single agreed-upon form of comprehensive insurance; Therefore, the comprehensive insurance policy may differ in its terms, conditions, and coverage from one company to another. As a result, many policyholders who often do not pay attention to reading the text of the document except when they fall into some kind of accident are exposed to problems; Disputes arise between them and the insurance companies over the limits and amount of coverage.
The most prominent requirements of comprehensive insurance rules for insurance companies

View optional coverages when purchasing insurance

Insurance companies must now offer a number of optional coverages to the insured before purchasing a comprehensive insurance policy. Optional coverages allow expanding what the insurance policy covers in exchange for an additional premium, such as:

  • Covering the driver who is related to the policyholder or the driver under his sponsorship
  • Death or bodily injury
  • Coverage of medical expenses

Determine repair costs

With regard to settling claims in the event of partial loss or damage, the rules oblige insurance companies to bear the costs necessary to restore the car damaged by the accident to the condition it was in before the moment of the accident. The repair costs shall include the following:

  • The value of repairing the damaged parts according to the accident damage assessment report
  • Labor wages in the agency or workshop (as specified in the insurance policy)

Determine the mechanism for applying the deductible amount

The excess amount is an amount specified by the insured in the policy schedule; It is the amount that he agrees to pay out of the value of each damage or loss to the car. That is, this amount is deducted from claims for damages to the car, and may not be deducted from claims resulting from civil liability against third parties.

In detail, the comprehensive insurance rules explained the mechanism for applying the excess amount in the following cases:

  • Claims resulting from third party liability – the excess amount is not deducted.
  • The driver’s responsibility for the accident is 0% – the excess amount is not deducted
  • In the absence of a second party to the accident – in the event that the insured acknowledges his responsibility for the accident, the company has the right to ask him to pay the excess amount.
  • In the event that the driver bears a percentage of the fault – the driver bears paying a percentage of the amount of the liability in proportion to the percentage of his responsibility for the accident only. The amount may not be doubled under any circumstances.

Not calculating the percentage of consumption

The rules also canceled the calculation of depreciation percentages for the replacement of spare parts and repairs for the comprehensive insurance campaign. Find out the percentage of depreciation in car insurance policies

Compared to insurance policies in the past, the insured was required to pay a depreciation value in exchange for the replacement of damaged parts with new parts based on the age of the vehicle. Now, the comprehensive insurance rules have made it clear that the company may not calculate the discount rate for depreciation in cases of partial or total loss.

Determining the insurance value by agreement between the two parties

The insurance value means the market value of the car; Where this value is equivalent to the price of the car in the market, and this value is supposed to be sufficient to purchase an alternative car of the same model and specifications.

The market value of the vehicle is of particular importance because it will be the basis for determining the price of the insurance policy, and will then become the basis for compensation when the vehicle is considered damaged.

That is why the comprehensive insurance rules stipulate that the insurance value of the vehicle is calculated by agreement between the company and the insured, provided that the company is committed to taking proper methods to reach this value. In order to reach this value, many insurance companies rely on the services of exhibition sheikhs in different regions of the Kingdom of Saudi Arabia.

Allocation of a percentage to consider the vehicle damaged

The car is considered damaged (total loss) when repairing the car is not technically or economically feasible. Provided that the company undertakes to compensate according to the market value of the vehicle agreed upon in the policy between the company and the insured

Technical Total Destruction: Cars that cannot be completely repaired (replacing) and whose registration is dropped from traffic.
Economic total destruction: Cars that can be repaired, but they are very expensive.

Comprehensive insurance rules include that the insured be given the right to determine the “economic loss” percentage on the basis of which the car is considered damaged. In the past, the cases of considering the car completely economically destroyed were one of the most prominent points of contention between insurance companies and dealers. The insurance company may decide to consider the car as a total loss if the repair costs exceed a high percentage of the car’s market value without prior agreement with the policyholder on a clear and specific percentage.

Therefore, the comprehensive insurance rules indicated the need to determine the percentage of “economic loss” on the basis of which the car is considered damaged by agreement in advance. In this way, the rules guarantee the right to repair the damaged vehicle.

 

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