MOTOR insurance has become not only mandatory but also an indispensible matter in the Kingdom. However, many vehicle owners continue to suffer despite taking out insurance because insurance companies refuse to comply with the conditions mentioned in the policy when a traffic accident occurs. Insurance companies are often accused of delaying payment disbursements for damages sustained to insured vehicles. When this happens, car owners are left with no option but to rent a car and wait for the insurance company to come through with the repairs. This often means that owners have to pay, out of pocket, for the rental vehicle for weeks and sometimes even months. Unfortunately, the majority of drivers are unaware of the conditions of an insurance policy and they just sign the policy without carefully reading the conditions therein. Ibrahim Al-Ruwais, a Saudi Electricity Company employee, said insurance companies in the Kingdom do not differentiate between those who have frequent accidents in a single calendar year and those who do not have any accidents. “Insurance fees are increased without any justifications. In my opinion, an insurance company should only raise the insurance costs if the insured driver's record shows a high frequency of accidents. The same is true when it comes to the long period a company spends before paying for the damages. “There should be some differentiation here as well because you can't treat someone who has an accident for the first time the same way as someone who has had several accidents in a given year,” Al-Ruwais said. Abdullah Sharahili, a government official, spoke about the suffering of people who have bought their vehicles on rent-to-own contracts. “If I have an accident, I have to go through endless measures in order to get approval from the company. I have no other option but to rent a car to get by until the insurance company has paid for the repair costs,” Sharahili said. Reinsurance Ibrahim Al-Ghafili, a government official, said the problem with insurance companies in the Kingdom is that all of them offer the same products and services. Most insurance companies rely on the reinsurance market and they do not have products that meet the needs of all customers. “Insurance companies should develop the concept of the cooperative system of reimbursement. All companies focus on one segment of the market – insurance for individuals, whether such insurance is medical or for vehicles. They have overlooked important segments of the market because they don't employ enough staff and they don't have the right tools to penetrate the market and each other's customers,” he explained. The market will eventually put two options on the tables for most companies: shape up or ship out. When this happens, companies with poor performance records will not be able to adjust and pull through the problems even if they raise the prices of insurance policies. Even if they inject funds into the market, they will find it hard to pull through and will be left with no other option but to merge with other companies to mitigate the loss impact. Lack of awareness Ahmad Moafa, school supervisor in Asir, said most people do not have the basic knowledge of insurance policies and this is the reason behind the problems that happen to the insured and the insurance companies. Moafa said while insurance companies make sure their full rights are guaranteed, they do not explain to the insured the conditions of the policy. “The insured finds himself signing documents he does not understand; he only realizes the obligations and responsibilities contained in the documents when he has a car accident,” he added. Moafa said the media should organize campaigns to raise public awareness about insurance and its importance and what it involves. Ahmad Hadad, a government official, called for monitoring the performance and activities of insurance companies, which currently number more than 60. There should be a system in place to ensure the companies comply with pertinent insurance regulations and rules. “Insurance involves so many procedures such as estimation of repairs and evaluation of damage. Keeping a close eye on the activities of these companies is important for eradicating all negative practices in the market,” he said.
