AI Summary
As the enforcement of the new regulations for comprehensive insurance of motor vehicles financially leased to individuals announced by SAMA is expected to be effective on November 1, 2020, the new rules aim to oversee the contractual engagement between leasing companies and their individual clients in relation to insurance coverage for the financially leased vehicles.
Insurance House Company (IHC), in cooperation with Rasan Tech - the technology arm of Tameeni platform, is introducing unique and efficient solutions for clients, who sell leased cars.
“By integrating advanced Tech solutions, leveraging expertise and relations with insurance providers, we are able to provide customized solutions for our clients that can minimize the impact of these changes for them, and provide multiple financial, operational, and technical benefits. All of these solutions are determined on our client’s competitive advantages and full compliance with the new rules,” IHC said in a statement.
Under the new regulations enforced by SAMA, the unified comprehensive insurance policy for motor vehicles financially leased to individuals is focused on covering vehicles that are owned under a leasing contract between a lessor and a lessee.
Essentially, an insurance provider commits to indemnify the beneficiaries of the insurance cover in case of damage or loss resulting from a risk covered under the motor insurance policy subject to a premium paid by the lessor and lessee identified in the policy schedule.
Under this policy, the maximum limit of the insurer's liability for one event, as well as, during the currency of the Policy should not exceed an amount of SAR 10 million when indemnifying claims for physical and/or material damages, as well as are expenses combined.
This policy is totally in accordance with the new SAMA rules and regulations for comprehensive motor Insurance.
SAMA directs that from November 1, 2020, any vehicle owned under a financial leasing contract shall be insured subject to the new rules.
The insurance coverage including policy conditions, provisions, or exclusions shall not exceed the minimum limits set by these new regulations.
Some of the key changes include:
● The lessor will be required to insure the vehicle leased on a year-by-year basis during the entire duration of the finance leasing contract
● The lessor will be required to source insurance offers from a minimum of three local insurance providers, choose the best offer of terms and conditions with the lowest price and provide the same to the lessee
● Insurance premiums will be calculated on a year-by-year basis depending on the changes of the sum insured and the pricing factors for the lessee. The sum insured refers to the value of the motor vehicle upon submission of the insurance coverage request approved by the insurer and identified in the policy schedule.
● At the beginning of the leasing contract, both the lessor and lessee are required to agree on the yearly depreciation percentage and specify it in the insurance proposal form.
● At the end of the insurance year, the lessor will be required to determine the balance remaining whether positive or negative from what the lessor has paid to the insurer and the premium paid by the lessee. Once this is done, the lessor should hold the balance in a lessee insurance account and provide a copy of it to the policyholder.
● At the end of the contract, the lessee will be entitled to either receive a refund of the extra amount of premiums paid or liable to pay the extra amount paid by the lessor to the insurance provider under the policy.
● The lessor and lessee will be required to reach an agreement on how the repairs are carried out, and clearly stated in the insurance form (agency or non-agency repair)
● Only the lessee shall have the right to request additional benefits to the policy and determine the deductible amount.
Be the first to comment
Comments Analysis: