KSA – Uniform compulsory motor contract updated
Monday, 07 23 2018, Category: Insurance and Reinsurance, Country: Saudi Arabia
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 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