Insurance Regulation Authority: New regulations for 'Comprehensive' vehicle insurance documents

Kuwait Insurance Authority issued Decision No. (53) for the year 2026 concerning the rules for issuing comprehensive motor vehicle insurance policies, including new controls for issuing and pricing documents, determining insured values, as well as regulating vehicle inspections, claims settlement, deductibles, and compensation amounts, thereby enhancing policyholders’ rights and regulating the relationship with insurance companies. The decision prohibits companies from reassessing the vehicle’s value after the policy has been issued or upon the occurrence of an accident, or from relying on its market value at the time of the accident in a manner that leads to a reduction in the insured amount or compensation. Companies are required to rely on the agreed value recorded in the policy at the time of issuance, in accordance with its terms, deductibles, and prescribed depreciation rates, if any. Neither party may later object to this value, except in cases of fraud, deceit, fundamental error, or inaccuracy of the data upon which the assessment was based.

The decision also prohibits imposing any deductible amount, percentage, or fee, regardless of its name, unless explicitly stated in the policy schedule or its specific terms, which the policyholder must have reviewed prior to issuance. It mandates specifying deductible amounts according to the type of accident, whether multi-party or single-party, and whether it resulted in total technical loss, partial economic loss, or partial damage.

The decision prohibits offering preferential or exceptional prices, or pricing below the prescribed minimum, without approved technical and actuarial justification. It also forbids issuing additional insurance products or policies outside the scope of reinsurance agreements without prior actuarial approval. Companies are required to calculate premiums based on the fair or market value of the vehicle at the time of policy issuance, reflecting its market price according to its condition, type, year of manufacture, and specifications.

The decision obligates companies to issue policies in Arabic, using clear and unambiguous language. It further stipulates that any ambiguity in the terms, exclusions, or deductible amounts shall be interpreted in favor of the policyholder, provided such ambiguity arises from the wording of the policy or its presentation method.

Before issuing a policy, companies are required to physically inspect the vehicle, photograph it, document its condition and any existing damages or defects, and record this in a dated written report.

Regarding repairs, whether inside or outside the authorized agency, the decision requires companies to specify the repair facility in the policy, either within the authorized agency or outside it at an approved workshop. In cases of repair within the agency, the repair or replacement decision shall be based on its technical report, unless exaggeration or obvious technical error is proven through a reasoned report. For repairs outside the agency, policyholders must be provided access to a list of approved and contracted workshops, while the company remains responsible for ensuring repair quality. Policyholders shall not be charged for transportation, flooring, or other costs resulting from repair delays, unless it is proven that the delay was caused by their action or omission, and after they have been notified in writing or electronically and given a reasonable deadline.

Regarding total loss of the vehicle, the decision limits the circumstances under which a vehicle is deemed totaled to two cases: total technical loss and partial economic loss. It requires that the claims file include a documented technical report detailing the vehicle’s condition, repair costs, and the basis for deeming it totaled. Compensation in both cases shall be calculated according to the insured amount, policy terms, deductibles, and depreciation rates, if any, while considering the agreed value at issuance. Ownership of the salvage shall transfer to the company if compensation is calculated on the basis of such transfer, unless the parties agree otherwise in writing.

In single-vehicle accidents where the insured bears a deductible percentage, resulting in total technical loss or partial economic loss, the company is obligated to pay the same deductible percentage from the value of the wreckage or its salvage proceeds, without prejudice to its right to deduct the deductible percentage from the compensation due.