RIYADH: Insurance companies have rejected recent remarks by the Riyadh Chamber of Commerce regarding adjusting insurance prices of vehicles, describing the chamber’s data as “untrue and unrealistic."

The transportation department at the chamber requested prices to be reviewed after a “400 percent increase,” a statement said.

The insurance companies spokesperson, Adel Al-Essa, admitted that insurance payments have massively increased, however he said that each company raised the price separately and at a different ratio “This raise is logical if we take into consideration the increasing cost of accidents which caused major losses to companies,” he said.

Al-Essa explained that the costs increased after “Dayyah” (money given to the deceased’s family) tripled, and after the range of coverage widened to cover almost all accidents, without exceptions, according to the unified document. “These two changes have massively increased the fixed costs especially for modern cars in addition to natural inflation for maintenance as well as the significantly increasing phenomenon of corporate fraud,” he added.

The spokesman for insurance companies referred to the committee’s remarks about a black market emerging from the huge rise in prices for vehicle insurance.

He pointed out that the committee's statement didn’t explain the correlation between high insurance rates for vehicles and a black market. “All vehicle insurance documents are filed right after issuing of the insurance document and sent to the national information center database,” he said wondering how a black market could arise when renewing the insured vehicle ’s license won’t be issued unless there is insurance information in the system.

The Transport Commission had accused the insurance companies of raising prices ''negating directives by the Royal Decree specializing in monitoring insurance regulations and its executive list, with amendments to make insurance valid on vehicles rather than the driver's license.”




The committee stressed the importance of getting insurance companies to achieve the purpose of insurance by linking insurance to three selectors: Vehicle’s body number; the vehicle’s serial number issued from the national information center and the plate number.

However, insurance companies said they provide insurance on the vehicle and not the driver, whereas the insurance covers the insured vehicle, no matter who the driver is, as long as the driver is considered within the age group covered by the insurance policy, as determined by the vehicle owner at the start of insurance coverage.