KSA’s car insurance prices highest in Arab world

KSA’s car insurance prices highest in Arab world
Updated 15 February 2016

KSA’s car insurance prices highest in Arab world

KSA’s car insurance prices highest in Arab world

JEDDAH: Prices of obligatory insurance on vehicles in Saudi Arabia are the highest in the Gulf and Arab states with almost double that of insurance policies in these countries, according to statistics by a local newspaper.
According to the survey, insurance on a Toyota Camry in Saudi Arabia reaches SR1,500 a year while the next highest country is Jordan with SR770.
In Egypt, insurance for a Toyota Camry reaches SR700, followed by the UAE with SR650, Bahrain SR600, Qatar SR412, and Lebanon and Kuwait came last with SR300 and SR347 respectively.
Insurance companies justify this variation in prices in comparison with Arab and Gulf countries by saying that companies bear the value of blood money in the Kingdom. According to the official spokesman for insurance companies, Adel Al-Isa, blood money increased in Saudi Arabia threefold which increased losses incurred by these companies.
He said insurance prices in the Kingdom are logical because of the increased cost of accidents in addition to the expansion in the scope of coverage, according to the unified document.
Al-Isa said prices increase on an annual basis and sometimes every three to six months if there is an emerging situation. He said insurance companies don’t have any authority, and blood money and obliging the companies to pay it increases prices.
He said the expected increase in prices will depend on the insurance: If profits are made there will be no increase in prices and current prices will continue, however if losses are incurred prices are expected to increase.
He said previous prices were left to the estimation of each company, and there weren’t many accidents in comparison with the current time, which led to the increase in prices.
He pointed out that Gulf states are different from Saudi Arabia in terms of geographical space in addition to the existence of the unified document which isn’t applied in Gulf states.
There are about 13 million vehicles, according to recent official statistics, whose insurance is obligatory for one year and should be renewed for three more years.
He said statistics show that vehicle insurance only covers 45 percent of cars, and insurance isn’t totally activated. Companies are trying to find solutions to control increases in prices through setting up a mutual database and activating insurance annually.
Ahmad Al-Asiri said insurance is increasing year by year and justifications by insurance companies are vague.
He said insurance against others in the Kingdom is obligatory and companies are sure that clients will buy insurance regardless of the price. He called on relevant authorities to provide obligatory insurance instead of unifying prices for all categories.