Accident-free customers to get car insurance discounts

The new law will give drivers another reason to avoid accidents.

RIYADH: The Saudi Arabian Monetary Authority (SAMA) has ordered car insurance companies to offer discounts to claim-free customers when pricing compulsory auto insurance premiums.
In a statement posted on its website, SAMA said the discounts should be made based on new pricing, adding that the ratio of the discount will be based on the number of years without any claims against the insured.
The rate of discount will reach 15 percent of the new insurance pricing for one year. Rates will reach up to 30 percent in a three-year period in the event claims are not registered against the insured, the statement said.
According to the SAMA website, car insurance firms also must provide “claim-free discounts” to individuals seeking comprehensive auto insurance premiums.
In recognition for their loyalty to their respective companies, insurance companies could provide another additional discount to their customers at a rate of 10 percent of the new prices of compulsory and comprehensive auto insurance premiums, the statement said.
The 10 percent discount will not be provided unless the insured renews his premium with the same company, without having any gap between the covered insurance periods, the statement said.
SAMA’s new directives will be effective in April 2017, the statement said.
The new step will encourage accident-free drivers to continue their good driving habits, and for those with previous accidents to exert more effort to avoid crashes, and to avail themselves of the new discount system, said Abdulaziz Abu Al-Saud, the head of the National Insurance Committee.
Insurance expert Imad Al-Husaini said the step was expected from SAMA, adding that the discount system will be applied on the new insurance pricing approved by companies.
Economist Mohammed Al-Anqari said the decision will bring about fairness for accident-free drivers which is globally applied where all customers cannot be treated equally.
Those who lack a clean record of accidents should pay a higher premium to encourage them to abide by traffic regulations in a manner that will minimize accidents and protect motorists, he said.
Salah Al-Jabr, the head of the insurance committee at the Asharqia Chamber, stressed the importance of linking traffic records of drivers with traffic departments, Najm Insurance, and insurance companies to determine the pricing.