Insurance Unit: No Re-evaluation of Vehicle Value After Policy Issuance or Accident

- A 90-day deadline is imposed to compel insurance companies to add QR codes to “Comprehensive” policy documents.

- Ambiguity in policy terms is interpreted in favor of the insured.

- Insurance companies are mandated to inspect and photograph vehicles before issuing policies.

- It is prohibited to impose deductibles and fees not stipulated in Comprehensive policies.

- Premiums for the remaining period must be refunded if the insurance company cancels the policy.

- Fleet insurance requires coverage for at least three vehicles.

- The agreed-upon value at the time of policy issuance serves as the basis for calculating compensation.

- Insurance companies are required to clarify whether vehicle repairs are conducted inside or outside the authorized agency.

- Companies are mandated to provide the insured with a copy of the vehicle inspection report.

- Insurance coverage continues during the notice period preceding policy cancellation.

- Vehicle wreckage must be documented and evaluated before disposal.

- A separate policy must be issued for each vehicle under fleet insurance.

- Commissions, gifts, and benefits not contractually stipulated are prohibited in the insurance sector.

The decision, issued by the Chairman of the Supreme Committee for Unity, Mohammed Al-Sulaiti Al-Otaibi, on November 9, 2026, mandated insurance companies to review and correct the models of Comprehensive insurance policies, their appendices, terms, issuance mechanisms, and claims management and settlement procedures, in compliance with the provisions of the decision and the laws and regulations governing the insurance sector.

The decision stipulated that Comprehensive insurance policies may only be issued or marketed by a company licensed by the Insurance Regulation Unit, and that such company must be included in the list of qualified entities authorized to issue mandatory motor vehicle insurance policies. It allowed for the direct issuance of policies by the company or through a licensed intermediary or agent linked to the company by a valid written contractual relationship.

Regarding policy terms, the decision mandated that companies prepare and draft them in Arabic, with translation into other languages permitted, provided that the Arabic text prevails in case of discrepancy. It further emphasized that any ambiguity or confusion in the policy terms, exclusions, or deductible amounts shall be interpreted in favor of the insured, provided such ambiguity arises from the policy’s drafting or presentation method.

The decision stressed the necessity of enabling the insured to review all terms, exclusions, coverage limits, and deductible amounts prior to policy issuance or premium payment, whether through an approved written or electronic means.

Concerning the pricing of Comprehensive insurance policies, the decision mandated companies to rely on their existing reinsurance agreements or on an approval issued by an actuary certified by the Unit, while adhering to the minimum pricing threshold based on approved technical standards. It prohibited offering preferential or exceptional prices below the minimum threshold without approved technical and actuarial justification.

Companies were also required to conduct periodic reviews of insurance premiums based on underwriting experience, loss and claim rates, and risk developments, documenting the review methodology and results. Premiums must be calculated based on the fair or market value of the vehicle at the time of policy issuance.

The decision confirmed that the value recorded in the policy and agreed upon between the company and the insured is the authoritative basis for determining coverage limits and compensation. The company is not permitted to reassess the vehicle’s value after policy issuance or in the event of an accident for the purpose of reducing the insurance amount or payable compensation, unless fraud, misrepresentation, fundamental error, or data inaccuracy is proven.

The decision further obliged insurance companies to physically inspect the vehicle before issuing the policy, photograph it, and document its condition, including any existing damages or defects, through a written and dated report. A copy of this report must be provided to the insured, who must sign it or provide electronic acknowledgment, with the report forming an integral part of the policy.

The decision also mandated that companies clearly specify the vehicle repair facility in the policy document, whether within the authorized agency or outside it at an approved repair workshop. In cases of repair outside the agency, the insured must be enabled to access a list of approved workshops contracted by the company.

It stipulated that the insured shall not be charged for vehicle transportation, towing, or any other expenses unless it is proven that the delay resulted from their act or omission, and after they have been notified and given a reasonable period to address the causes of the delay.

Regarding insurance claims, the decision obliged companies to receive every claim submitted by the insured or the insured party, register it, open a separate file for it, and provide the submitter with a receipt acknowledging its submission. The claim must be reviewed and adjudicated in accordance with the policy terms, approved procedures, and timelines.

Companies were also required to request all necessary documents in a single batch whenever possible, and not to suspend or reject claims for non-substantive reasons. In the event of total or partial rejection, or refusal to open a claim file, the submitter must be notified of a reasoned decision clarifying the policy provisions and the documents relied upon by the company.

The decision specified the necessity of detailing deductible amounts and percentages in the policy schedule according to the type of accident and claim, including multi-party accidents, single-party accidents, total or partial losses, and windshield replacement. It prohibited imposing any deductibles or fees not explicitly stated in the policy or its special conditions.

Furthermore, it restricted the classification of a vehicle as a total loss to cases of technical total loss or economic partial loss, requiring a documented technical report that clarifies the vehicle’s condition, the repair cost, and the basis on which the company made its decision.

The decision also regulated the handling of vehicle wreckage in cases of total loss, mandating that its condition be documented and evaluated before disposal, that a fair value be obtained for it, and that supporting documents for the evaluation, disposal, and proceeds be retained.

The decision addressed the controls for cancelling comprehensive insurance policies, obliging companies to clarify the cancellation policy and the method for calculating due premiums or amounts to be refunded to the insured. It stipulated that the premium value for the remaining days must be refunded without deducting compensation if the cancellation is initiated by the company, provided that the cancellation is justified.

It required notifying the insured of the cancellation and specifying the notice period, with insurance coverage remaining in effect during this period. It also prohibited the cancellation of mandatory policies or those issued based on the requirements of a competent authority without obtaining prior written consent from that authority.

The decision permitted the issuance of supplementary fleet insurance policies under a single agreement covering at least three vehicles, with a separate policy issued for each vehicle containing its details, insured amount, coverage, deductibles, and special conditions. The prescribed fee per unit is applicable for each policy.

In the context of enhancing digital transformation and data protection, the decision obliged insurance companies to send policies and their appendices to the insured via email or any other approved electronic means, including a QR code. This enables electronic verification of the policy data, insured amount, coverage period, terms and conditions, exclusions, premiums, deductibles, and appendices.

It required the application of cybersecurity and data protection controls when designing and operating verification systems, with the policy status clearly displayed as active, cancelled, or expired. The use of shortened links or links redirecting to domains outside the company’s official approved website was prohibited.

The decree grants insurance companies a 90-day deadline from the date of its publication in the Official Gazette to comply with the requirement to include a QR code in comprehensive insurance policies, and prohibits the issuance of any policy without including it after the deadline expires.

The decree affirms the legal liability of companies for violating its provisions, and empowers the Unit to take necessary supervisory measures, including compelling the company to amend policy forms, suspend the use of non-compliant forms, review claims, or refund amounts collected without justification, in addition to imposing legally prescribed penalties.

The Unit confirmed that the decree takes effect from the date of its issuance, and shall be published in the Official Gazette.