RIYADH, 22 July 2004 — Insurance companies have reported a big increase in claims from young drivers during the first half of 2004.
Most claims came from drivers under the age of 21. The increase in claims soared by 100 percent, according to a report published by Al-Madinah newspaper recently.
Responding to the sharp increase in claims that caused big loss to the company, the National Company for Cooperative Insurance (NCCI) has increased its premium for young drivers carrying a temporary license and under the age of 18 from SR710 to SR1,200 per year. For drivers holding a private license and under the age of 21, the premiums rose from SR530 to SR1,000 per annum.
Saad Al-Marzooki, deputy manager for technical affairs at NCCI, said the rate of loss on insuring young drivers’ license was very high. The amount the company spends in paying for damages is higher than the amount it receives as premiums. He said the increase in premiums will affect only young drivers and those involved in car accidents. Drivers with clean records will not be affected.
In 2003 the company detected 23 cases of fraud, but in the first half of 2004 alone, more than 250 fraudulent claims were found. He suspected there were many more that were never discovered.
