IA: Driver coverage varies by vehicle insurance policy type

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The Insurance Authority (IA) said insurance coverage for drivers varies depending on the type of vehicle insurance policy, amid recent discussions over the scope of coverage.

The authority stressed the need to distinguish between third-party liability coverage and coverage for damage to or losses incurred by the insured vehicle.

Under comprehensive insurance for individuals' private vehicles, coverage extends to the insured and certain relatives, including the father, mother, husband, wife, son, daughter, and brother, as well as a driver sponsored or employed by the insured under an employment contract, subject to the policy's terms and conditions and statutory driving requirements, the IA said in a statement.

Other drivers who do not fall within the policy's definition of a covered driver may be added as "named drivers" by including their names in the policy schedule, subject to the insurer's procedures and approved underwriting and pricing rules.

The authority said failure to name a driver does not necessarily mean that all insurance coverage is forfeited, as third-party liability coverage is separate from coverage for damage to the insured vehicle.

If a vehicle is driven by a driver who is eligible for coverage but is not named in the comprehensive policy, civil liability toward third parties remains covered under the terms and conditions of compulsory motor insurance.

However, basic comprehensive insurance does not cover loss or damage to the insured vehicle resulting from an accident if the driver is not covered under the vehicle's prescribed coverage, unless the policy includes additional coverage specifically covering such a case, the authority said.

An accident involving an unnamed driver could therefore result in compensation being paid to the affected third party, while damage to the insured vehicle itself may not be covered. This depends on the driver's age and status, the policy terms, and the additional coverage selected.

In some cases, the insurer may also have the right to seek recovery from the insured or the driver after compensating the third party, if any of the recovery cases set out in the Unified Compulsory Motor Insurance Policy apply. This does not affect the third party's right to compensation under applicable regulations, the IA said.

Under compulsory third-party motor insurance, the main purpose of the policy is to cover civil liability toward third parties for bodily and material damage and expenses arising from an accident, in accordance with the policy's terms.

Such coverage does not require the driver to be a relative of the vehicle owner or to be named in the policy, subject to statutory driving requirements and the recovery cases and exclusions set out in the policy.

For comprehensive insurance covering vehicles leased through financing by individuals, coverage for the vehicle itself is linked to authorized drivers whose details are recorded in accordance with the policy's terms and schedule, the authority said.

Anyone seeking to add another driver must complete the required procedures and obtain the necessary statutory authorizations from the relevant authorities and the insurer.

The IA urged policyholders to review their policy schedule, coverage, and exclusions before allowing anyone else to drive the vehicle, particularly whether coverage for the vehicle itself extends to an additional driver.

It cautioned against assuming that comprehensive insurance covers the vehicle in all circumstances.

The authority also stressed that third-party coverage and coverage for the insured vehicle are separate matters. A third party may be entitled to compensation following an accident even if damage to the insured vehicle itself is not covered.

According to Argaam data, the IA recently said it was reviewing the vehicle insurance pricing mechanism to ensure insurers comply with regulatory standards and help ensure pricing is fair and not excessive.