Car insurance premiums increase 400 percent in Saudi Arabia

Insurance experts, meanwhile, blamed concrete blocks along the roads for increasing number of traffic accidents

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Car insurance prices in Saudi Arabia have gone up 400 percent as motorists and vehicle owners have called upon authorities to bring down charges to affordable levels.

Insurance experts, meanwhile, blamed concrete blocks along the roads for increasing number of traffic accidents. They also accused Najm company of attending accidents very late.

“This has hiked road accidents by 15 percent and contributed to increasing insurance premiums,” said one expert while speaking to Al-Watan Arabic daily.

“Najm should find a solution to ensure quick handling of accidents,” he added.

Experts believed that car insurance premiums are likely to go up further as a result of increasing accidents on the Kingdom’s roads and streets due to reckless driving.

Talal Al-Batti, an insurance expert, said road works across the country have contributed to increasing accidents. “It has also affected smooth flow of traffic,” he added.

He said the total number of accidents in the Kingdom in a year is expected to cross 1.1 million by the end of this year. “Road accident rate has been growing in the Kingdom at alarming levels in recent years causing human and material losses,” he added.

He said losses suffered by insurance companies as a result of road accidents reached 105 percent, including operation expenses.

Third party insurance premiums range between SR1,000 and SR2,000 while comprehensive insurance premiums differ from one company to another considering the car’s value.

Al-Batti said there are many reasons for increase in car insurance premiums including fake accidents, lack of classification of clients in pricing policy, fall in the value of coverage and lack of strict application of conditions mentioned in the scheme, which increases losses.

Speaking about other reasons, he said: “Insurance companies suffer losses when they do not get any money when they sell totally damaged vehicles and customers are not informed that the premium would increase when the company’s losses rise. This way many factors are considered for pricing.”

Abdullah Al-Rizqi, who is an expert in settling insurance conflicts, said accidents caused by the wrong positioning of concrete blocks along roads are covered by insurance companies. “This is one of the weak points of the insurance scheme,” he told Al-Watan.

“The closure of roads without pre-planning is one of the reasons for increasing traffic accidents,” he said. According to Al-Rizqi, the accident statistics in the Kingdom are not correct as they are not based on dependable information. “It’s provided by Najm and other sources. At the same time, Najm does not cover all parts of the Kingdom,” he explained.

This article was first published by Saudi Gazette on November 6, 2016.