What is the aim of cooperative insurance?

The cooperative insurance aims at protecting the insured against potential risks and accidents and bringing them back to their financial position before the incident.

What are the exclusions of motor insurance?

The cases involving an accident or risk that is excluded from the insurance coverage, and the insurer is not laible for indemnifying the insured for the damages caused to his/her car as a result of such accident or risk. Such cases are included in the policy under “Exclusions” or “Exclusions from the Coverage Limits” or “General Exceptions”. For example: Disaster risks. Risks resulting from driving a car by a person under the age of 21.

What is a coverage limit?

A coverage limit is the maximum amount an insurer can pay for a covered loss. It is the maximum financial liability an insurer can assume in case of any risk or accident incurred by an insured. For example: The maximum limit of the insurer's in accordance with the coverage limits of the motor insurance policy is SAR 8,000,000 (eight million Saudi riyals) for material damages and SAR 3,000,000 (three million Saudi riyals) for physical damages, and any amounts exceeding these limits of coverage should be borne by the insured.

What does insurable interest mean?

It is the legal right of a natural or legal person to have insurance coverage on any of their properties (e.g. a car, a house, etc.), provided that a legal relationship must exist between the insured and the subject matter of insurance; a person has the right to have insurance on objects with which they share a legal relationship or an insurable interest, whereas others cannot have insurance on any object belonging to that person because there is no legal “ownership” relationship with that object.

What are the supporting documents for a claim of medical (health) insurance?

All documents relating to a claim, such as those indicating the age, nationality and identity of the insured, validity of the policy, accompanying circumstances of the accident subject of the claim and incurred expenses in addition to the following documents: Invoices, receipts, prescriptions, medical reports, referrals, recommendations and any other orginal documents may be deemed necessary by the insurer.

Does the insured bear a proportion of the cost of healthcare treatment or does the insurer bear all costs of such treatment?

It depends on the type of the insurance policy. In some policies, the insured bears costs and expenses at a certain percentage in accordance with the insurance agreement entered into between the insured and the insurer. However, in other policies the insured is not liable for any expenses, and policies of this type are very expensive compared with other polices.

What diseases that are usually excluded from the coverage of medical (health) insurance by the insurers?

The following diseases that are excuded are as follows:
  • Cosmetic surgeries except those required for reconstructing deformities ensuing from an accident covered under the insurance policy.
  • Chronic diseases suffered prior to entering into the insurance contract, such as diabetes.
  • Routine medical check-ups for employment or travel.
  • Steroids and vitamins.

What are the excluded risks of property insurance?

  • Damages caused by riots and domestic conflicts unless agreed upon or endorsed by the insurance policy.
  • Damages ensuing from wars whether declared or undeclared
  • Damages of radioactive contamination whether it is the direct cause or not.
  • Injuries or death caused by pollution.
  • All types of consequential losses.
  • Terrorism risks
  • Damages ensuing from maritime risks provided that their exclusion has been clearly stated in the insurance policy.

What are the coverage limits of property insurance?

  • The coverage of the insured item(s) whether it is real estate or a movable asset against risks (e.g. fire, theft, pipe cracks, natural hazards, etc.).
  • Contents of the item(s) insured.
  • Personal liability.
  • Legal liability against death cases and casualties caused by unforeseen accidents to the insured property.
  • Rent loss for the landlord owing to the real estate’s unsuitable condition arising from a defect or risk falls within the limits of the coverage provided for in the insurance policy.
  • The cost of an alternative accommodation while the damaged real estate is being repaired.

What are the types of property that can be insured?

Insurable properties can be divided into three categories:
  • Buildings: The structure of the building and its attachments.
  • Machinery and other contents: All the building contents except stock that might be stored in the storehouse or the building.
  • Stock: All items in the custody of the insured whether he/she owns them or not, and the items and goods kept by an organization whether it owns them or not.

What are the supporting documents for a claim of motor insurance?

To file a claim, the insured shall have documents proving the validity of the insurance policy and presenting the accompanying circumstances of the accident from which the claim originated. In addition, the insured shall provide the accident report issued by the General Department of Traffic and any other original documents the insurer may require, including:
  • Driving license.
  • Vehicle registration.
  • Insurance policy.

What are the things that you should check when purchasing a comprehensive motor insurance policy?

  • Limits of Coverage: The amount of coverage stated in the policy or the vehicle’s market value at the time of the accident, whichever is lower, represents the insurer’s maximum liability for compensation. It is important that you report the actual value of your vehicle to the insurer when applying for an insurance policy and to be precise about its value at the time of the renewal of such policy.
  • Percentage of Depreciation: The principle of depreciation applied to the insured item refers basically to the principle of compensation, which aims at restoring the insured to his/her same financial position prior to the loss suffered. This method is used widely by the insurers as a means to compensate for the actual value of the damage incurred, in addition to taking consideration of the lifespan of the depreciated spare parts. For example: If a car had an accident after six months of insurance, in which it was totally wrecked, and its value was SR 100,000 at the time of the purchase of the insurance policy, the insurer will not reimburse the insured for the whole amount, but will consider the depreciation amount of the car for six months, and deduct that amount from the reimbursement amount.
  • No Claims Discount (NCD): Some insurers offer to insureds “no claim discount” by which insurance premiums are reduced to the insured for the next year due to having a claim-free and accident-free record over the previous insurance year. This offer serves as a financial incentive and encouragement to the insureds.

What is the comprehensive motor insurance policy?

A comprehensive motor insurance policy has two parts. The first part of this policy covers damages or injuries suffered by the insured, his/her car (the car is covered against fire, theft, and incidental accidents) and other passengers. The second part covers damages and injuries incurred by a third party (both properties and individuals).

What is the compulsory motor insurance policy?

Compulsory insurance policy covers the damages caused by your car to a third party, both individuals and properties. This policy does not cover the damages suffered by you or your vehicle. For example, if you have been in an accident, and the accident is 100% your fault, the insurer will compensate the third party in that accident against all the damages he/she has suffered, but the insurer will not compensate you for the damages incurred by you or your vehicle.

What is a deductible (copayment)?

It is an amount provided for in the policy schedule and paid by the insured in case an accident or risk falls within the coverage limits of the insurance policy is incurred. For example: In the event of a car accident with a SAR 10,000 cost of repairs, and the deductible amount is SAR 2000, the insurer bears SAR 8,000 and the insured bears SAR 2000.