Insurance Unit: Mandating Companies to Clarify Repair and Compensation Terms

The Insurance Regulation Unit issued a new decision that strengthens the financial rights of car owners with comprehensive insurance policies and prohibits insurance companies from reducing compensation payouts after accidents on the grounds of a decline in the vehicle’s market value. The decision obligates insurers to rely on the agreed-upon value at the time the policy was issued and bars them from re-evaluating the vehicle to reduce compensation amounts, in accordance with established conditions and regulations.

Decision No. 53 of 2026, issued by Mohammed Sulaiman Al-Otaibi, Chairman of the Supreme Committee of the Insurance Regulation Unit, sets out new regulations for issuing supplementary vehicle insurance policies (comprehensive coverage). These regulations cover policy pricing and the determination of insured value, vehicle inspection and repair, claims settlement, and prohibit the imposition of fees or charges not previously agreed upon, thereby providing greater protection for vehicle owners in the event of accidents.

Among the key provisions of the decision is the prohibition of re-evaluating the vehicle’s value after the insurance policy has been issued or after an accident occurs, if such re-evaluation would result in a reduction of the insured amount or the compensation due. Insurers are mandated to adopt the value recorded in the policy and agreed upon with the vehicle owner at the time of issuance.