Saudi Arabia: Proposed Amendment for Comprehensive Insurance Coverage for Lessees
The Insurance Authority has proposed amendments to the Insurance Law to enhance comprehensive insurance coverage for lessees.
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This amendment seeks to provide additional coverage to the drivers associated with the vehicle, including:
- Relatives of the lessee
- Drivers sponsored by the lessee
- Drivers employed under a contract by the lessee
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Purpose of the Amendment
The proposed changes aim to:
- Protect the rights of the insured and other beneficiaries.
- Improve the vehicle insurance sector, ensuring comprehensive coverage for individuals who lease vehicles.
Key Changes in the Insurance Law
- Amendment to Article 2, Paragraph 11:
- Current Definition: “Driver: The person authorized to drive the vehicle and whose name is recorded in the policy schedule.”
- Proposed Definition: “Driver: The lessee and the driver related to the lessee, including his/her father, mother, husband, wife, son, daughter, brother, sister, or the driver under the sponsorship of the lessee or working for the lessee under an employment contract.”
- Amendment to Article 5, Paragraph 2:
- Current Requirement: “The lessor must obtain insurance quotes from at least three companies and select the best and lowest-priced quote from them and present it to the lessee.”
- The proposed draft retains this requirement but emphasizes the importance of presenting competitive insurance options to lessees.
Background
The regulations for comprehensive insurance on auto lease financing for individuals were implemented on November 1, 2020.
The current amendments reflect the authority’s ongoing commitment to protecting the rights of individuals engaged in vehicle leasing and enhancing the overall insurance framework.
This initiative aims to provide better coverage options and clarity regarding who is considered an insured driver, thereby promoting a more efficient and equitable insurance market.
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