The Unified Compulsory Motor Insurance Policy of Saudi Arabia

Article 1

Based on the Law on Supervision of Cooperative Insurance

Companies issued under Royal Decree No. M/32 dated

02/06/1424 H, the Implementing Regulations issued under the

Minister of Finance's resolution No. 1/596 dated 1/3/1425 H, and

the Council of Ministers' Resolution No.222 dated 13/08/1422 H

concerning compulsory motor insurance, this unified policy shall

be effective as from the date of its approval by SAMA's Governor,

and shall replace the "Third Party Liability Insurance Policy

(Motor)" issued by the Governor's resolution No. 1/427 dated

18/05/1427 H.

Article 2

Definitions

The following words and phrases in this policy, wherever they

occur shall have the meanings indicated against each, unless the

context indicates otherwise:

1. Compulsory Insurance Policy (the policy):  motor third

party liability insurance policy under which the insurer

undertakes to indemnify the third party upon the

occurrence of a loss covered under the policy, for  a

premium paid by the insured. This policy shall include the

promissory warranty certificates and appendices (if any)

provided that they shall not contradict or violate  the

provisions stated in this policy.

2. Company (the insurer):  an insurance company that

accepts insurance directly from the insured.   

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3. The insured:  a natural or juristic person who signs with

the insurer the insurance policy and whose name is stated

in the policy schedule. 

4. Driver:  whoever is driving a vehicle, public work

equipment or a motor bike at the time of the accident.

5. Vehicle: any transport means designed to move by wheels

or chain, being moved or pulled by an engine or animal

power, as described in the policy (trains are excluded).

6. Third party: any natural or juristic person who sustains

loss covered under the provisions of this policy, excluding

the insured and/or the driver. 

7. Physical damages: death and/or physical injuries which

may be inflicted on the third party, including partial or total

disability, whether permanent or temporary.

8. Material Damages: damages to property belonging to the

third party.

9. Medical expenses: costs and expenses of medical

treatment and medicines, which are incurred by the  third

party as a result of an accident covered by insurance under

this policy.

10.Other expenses: expenses which are incurred by the third

party because of the accident, including the expenses of

towing or transferring the vehicle and damage assessment

costs.

11.Claim: written notification submitted to the company

requesting indemnity for an accident covered under  the

provisions of this policy.  

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12. Claimant: natural or juristic person who is harmed due to

an accident covered under this policy, including the heirs of

the natural person in the event of his death.

13.Indemnity: amounts to be paid by the company to a third

party within the maximum civil liability specified  in this

policy.

14.Premium: amount paid by the insured to the company for

its agreement to indemnify the third party for damage or

loss whose direct cause is a risk covered under this policy.

15.Civil liability:  the liability of the insured and / or the

driver towards a third party for material or physical

damages inflicted by the insured vehicle.

16.Material fact: any fact that affects the company's decision

to accept or reject insurance or affects the insurance

premium or terms and conditions of the contract.

Article 3

Insurance coverage

Whereas the insured has submitted to the company an insurance

proposal form, which is considered the basis for this policy; and

has paid (or has undertaken to pay) the required premium; and the

company accepted this proposal, the company shall, in the event

of a loss covered under this policy whether such loss arose from

the use of a vehicle or its stopping in the territory of the Kingdom

of Saudi Arabia, indemnify in cash the third party in accordance

with the terms and conditions set forth in this policy for all the

amounts that the insured or the driver is committed to pay for:  

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a) physical damages caused to a third party inside or outside

the vehicle.

b) material damages outside the vehicle.  

Article 4

Coverage limits

In the event of the occurrence of an accident resulting in the

payment of indemnity in accordance with the provisions of this

policy, the maximum limit of the company's liability for one event

for both physical damage (including blood money, bodily injuries

damages and medical expenses) and material damages, shall not

exceed together a total sum of SR 10,000,000 (ten million Saudi

riyals) as a coverage liability limit. 

Article 5

                    Cases in which the company is not allowed to disclaim

liabilities towards third- party

The company may not disclaim liability for indemnity under this

policy towards the third party because the insured or the driver has

committed any violation, whether the violation has been before or

after the accident, or because of the insured’s or the driver’s non-

compliance with what is stated in this policy, without prejudice to

the company’s right of recovery from the insured or the driver

after indemnifying the third party if the recourse is justified.  

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Article 6

Cases in which the company is committed to indemnify the

third party while reserving the right of recourse against the

insured, the driver or the person causing the accident.

The company has the right of recovery from the insured, the driver

or the person causing the accident to recover the amount it had

paid to the third party in any of the following cases:

1. Any liability or expenses arising or occurring where the

insured vehicle is:

a. Used in contravention of restrictions set forth in the

schedule. 

b. Carrying passengers beyond the capacity authorized

for the vehicle, and it has been proved that the

accident occurred because of this violation. 

c. Used in any type of racing, in determining the speed

of starting off, or in testing the ability to drive.

d. Driven by a person under the influence of drugs,

alcohol or medicines that are not allowed to be taken

when going to drive.

e. Driven by any person under the age of 21 years

unless insured or among the names of authorized

drivers whose age is less than 21 years under the

policy schedule .

f. Stolen or taken by compulsion.  

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g. Driven by any person not carrying a driving license

or a permit qualifying him to drive this type of

vehicles or whose driving license is temporarily or

permanently suspended .

h. Used in areas that are normally not allowed for the

public to drive in such as airports or seaports, unless

the vehicle is used for commercial purposes to be

driven within the allowed area.

2. If it is proved that the insured has made false

representations or concealed material facts in the insurance

proposal form in such a way as to affect the company

acceptance of risk coverage, the insurance premium or its

terms and conditions.

3. If it is proved that the accident was made deliberately by

the insured or the driver .

4. Failure on the part of the insured to notify the company in

writing within ten working days of any material change to

his disclosures in the insurance proposal form .

5. Escape of the insured or driver of the vehicle from the

scene of the accident. 

6. Acknowledgement by the insured or the driver to bear the

liability for the accident undeservedly for the purpose of

harming the company.

7. Crossing the traffic red light by the insured or driver .

8. Driving the vehicle in the opposite direction of the traffic

line.  

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9. Car drifting.

Article 7

Claim Settlement Procedures

Upon receiving any claim, the company shall be committed to

provide the claimant with a receipt acknowledging its receipt and

informing the claimant of any missing documents, within 7 days

from receiving the claim. It shall also appoint an assessor or loss

adjuster, if necessary, within a period of no more than 3 days from

receiving the claim.

The company shall settle the claim amounts, as determined by the

General Traffic Department or Najm Company for Insurance

Services or other authorized entities,  and covered under this

policy with integrity and fairness without any bargaining, within a

maximum period of 15 Hijrah Calendar days from the  date of

receiving the claim with complete documents. If the company fails

to settle the claim within that prescribed period for unjustified

reasons, the beneficiary under this policy, shall be entitled to file a

petition of dispute at the Committees for Resolution of Insurance

Disputes and Violations, to compel the company to compensate

the beneficiary for any incurred expenses as a result of loss of use

of his vehicle due to the company's delay in settling the claim

(such as the costs of hiring an alternative car) .

The company shall be committed to inform the claimant in writing

of its acceptance or rejection of the claim. In case of acceptance,  

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the company must clarify the amount of indemnity, and how it

was reached. In case of rejection, the company shall:

1. Provide the claimant with the reasons for rejection .

2. Inform the claimant of his right to file a petition of  his case

to the Committees for Resolution of Insurance Disputes

and Violations according to Article 20 of the Law on

Supervision of Cooperative Insurance Companies, so as to

be considered by those committees .

3. Provide the claimant, upon his written request, with copies

of documents in support of the company’s decision.

Article 8 

General Conditions

1. Multiple sources of insurance and other insurance coverage:

If the vehicle is insured with the same type of insurance by more

than one company, the company shall only pay a portion of the

indemnity amount, expenses or fees equal to the ratio between the

sum insured and other total sums insured. In case there is another

type of any insurance, which covers the liability or expenses for

the same cover (such as the availability of motor comprehensive

insurance policy), the company shall be liable to cover that

responsibility or other expenses incurred by the third party, and

then it subrogates on behalf of the insured by requesting other

insurance companies to pay their relative percentage of such a

claim. 

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2. Alterations:

The insured shall, within 10 working days, notify the company in

writing of any material change in the representations that have

been stated explicitly by him in the insurance proposal form. The

company shall notify the insured within 3 working days from the

date of receiving the insured’s aforementioned notification if it

decided to refuse to provide coverage to the insured. 

3. The company's subrogation right to handle legal proceedings

and settlement:

The company has the right to:

a. Represent the insured or the driver in any investigation or

interrogation related to a claim subject of indemnity under

this policy.

b. Handle legal proceedings for defending the insured or the

driver before any judicial body against any allegation or

accusation related to an accident subject of indemnity

under this policy.

4. The company's right to include the insured's name in the

Saudi Credit Bureau (SIMAH) system:

The company has the right to include the name of the insured in

the Saudi Credit Bureau (SIMAH) system if  the insured defaults

in paying the amounts due to the company, whether insurance

premiums or claims recoveries.

5. Obligations of the insured or driver in case of occurrence of an

accident covered under this policy: 

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a. Shall inform the concerned authorities as soon as an

accident, covered under this policy, occurs and shall not

leave the scene of the accident until procedures will have

been completed, except in cases where leaving the scene of

the accident is required such as in the case of physical

injuries or awaiting for the concerned authorities  for not

less than two hours.

b. Shall not claim responsibility with the intention of harming

the company, pay or undertake to pay any amount to  any

party involved in the accident except after obtaining a prior

written approval from the company.

c. Shall cooperate with the company, and issue powers  of

attorney enabling the company to carry out the

proceedings, defending and settlement procedures on

behalf of the insured or the driver if the company expresses

its desire to do so.

d. Shall, at the company's expense, perform all required works

to guarantee the company's right for recovering from any

other party any amounts due to it as a result of indemnity

paid by it in accordance with this policy.

6. Obligations of the Company in case of delay in settlement of a

claim with completed documents:

The company shall be committed to compensate the beneficiary of

the coverage of this policy for any cost incurred as a result of loss

of use of his damaged vehicle due to the company's delay for more

than 15 days in settling the claim after completion of all required  

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documents of the claim, without providing acceptable excuses for

the delay of paying the indemnity.

7. Fraud:

The right arising from this policy shall be forfeited if the claim

involves fraud; or if the insured, the driver or the agent of any of

them or a third party uses fraudulent ways or methods to gain

benefit from this policy; or if liability or loss results from a

deliberate act by the insured, the driver, or others or due to

collusion with any one of them. The company may recourse to any

party who appears to have been responsible for this fraud either by

participation or collusion. Then the company, however, shall be

committed to indemnify a third party if his intention is good.

8. Cancellation

Neither the company nor the insured shall have the right to cancel

this policy after its issuance except in the following situations:

i. Cancellation of the vehicle registration.

ii. Transfer of ownership of the vehicle to another owner.

iii. Producing a substitute policy from another company.

If the insured desires to cancel his policy, he shall return the

policy to the insurer along with a cancellation request, and the

insurer shall be committed to pay, within fifteen working days

from the date of request, a proportional amount of the premium

according to the following table: 

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Validity period of the policy before

requesting cancellation

The proportional amount of the

premium to be paid by the company to

the insured

1-7 days 87.5%

8-30 days 75%

31-60 days 60%

61-90 days 50%

91-120 days 45%

121-150 days 40%

151-180 days 35%

181-210 days 25%

211-240 days 20%

241-270 days 10%

271-365 days 0%

Despite what has been mentioned before, the insurer, the insured,

and the driver shall remain committed to the provisions of the

policy in connection with obligations arising before its

cancellation.

9. Policy Issuance and Renewal Notification:

The company may not issue this policy if it is not  electronically

linked with the system of Najm Company for Insurance Services.

The company shall notify the insured of the expiry  date of the

policy two weeks prior to the expiry date, so that  it can be

renewed or replaced by a policy from another company.  

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10. Judicial jurisdiction and governing law:

a. Any dispute that arises in connection with this policy shall

be subject to the laws and regulations in force in  the

Kingdom of Saudi Arabia, and it shall be settled by the

Committees for Resolution of Insurance Disputes and

Violations set forth under Article No. (20) of the Law on

Supervision of Cooperative Insurance Companies, issued

by Royal Decree No. M/32 dated 2/6/1424H.

b. Any case arising in connection with this policy shall not be

looked into after three years from the occurrence of the

incident of which the parties concerned were informed,

unless the Committees for Resolution of Insurance

Disputes and Violations is satisfied with the reason for its

consideration.

                    

Article 9

    Exclusions (Cases uncovered under this policy)

Insurer shall not be liable for paying any indemnities in any of the

following cases:

1. 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 declaring or

continuation of martial laws, siege, or acts of

vandalism and terrorism committed by person(s)  

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working individually or on behalf of or related to

any terrorist organization. Terrorism shall mean the

use of violence for political, intellectual,

philosophical, racial, ethnic, social, or religious

purposes. The use of violence includes putting the

public and/or a segment of it under panic condition;

affecting and/or causing turmoil; intervening in any

operations and/or activities or policies related to the

government; or causing turbulence negatively

affecting the national economy or any of its sectors.

c. Strikes, riots, or civil or labor disorder.

d. What has been caused by, arisen from, or

contributed to by nuclear weapons, ionizing

radiations, radioactive contamination due to any

nuclear fuel or waste which results from the burning

of nuclear fuel. For the purposes of this exclusion,

burning shall include any nuclear fission process.

e. Natural disasters such as hurricanes, earthquakes,

floods, or volcanoes.

2. Death or physical injury to the insured, or driver.

3. Loss or damage to the insured vehicle or properties

pertaining to either the insured or the driver inside or

outside the vehicle.

4. Damage or loss to the goods transported by the insured

vehicle.

5. Fines, financial penalties, guarantees or warranties which

may be imposed on the insured or the driver due to  the

accident. 

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6. Accidents occurring outside the geographical territory

specified in the policy schedule.

Article 10

Distribution of Surplus

The surplus shall be distributed to insured beneficiaries in

accordance with the provisions of Article 70 of the Implementing

Regulations of the Law on Supervision of Cooperative Insurance

Companies issued by Royal Decree No. M/32 dated 2/6/1424 H.  

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Schedule of the Unified Compulsory Motor Insurance Policy

Insured Type:  Personal/ Commercial Policy No.

Insured Particulars

Insured's ID No.

1. Personal (individual)

• National identification number for Saudi nationals

• Residence permit (Iqama) number for expatriate individuals

2. Computer number of companies and institutions

Name of insured

Phone No.

Address

Vehicle Particulars

Owner's ID No.  Owner's Name

Plate No.  Chassis No.

Color

Vehicle Registration

Expiry Date

Type of Chassis  Customs Card No.

Vehicle Brand

Year of

Manufacture

Vehicle Model  Purpose of Use

Type of Registration

(Private/ Private Trans/ Private Bus/ Public Transportation Vehicle/

Public Bus/ Taxi/ Diplomatic and consulate / Temporary/ Public Works

Vehicle/ Motorcycle) Plate

Coverage Type  Comprehensive/ Third Party

Names of the

Authorized Drivers

under the age of 21

(with their Driving

Licenses' Numbers)

Geographic Limits  On the Saudi Arabian Territories

Use Restraints  Insured Shall not Use the Vehicle for Other than Its Licensed Purpose

Premium Amount

Policy Issuance Date

Coverage Period

From……………(Day) …./…./…..(Date) ……….(Time)

To    ……………(Day) …./…./…..(Date) ……….(Time)