The difference between the two types of car insurance in Saudi Arabia is that third-party insurance, which is the compulsory insurance, compensates the third party for the physical and material damage your vehicle causes and does not cover your own car, while comprehensive insurance compensates you for damage or loss to your car, including fire, theft, floods and hail, and also includes liability towards third parties. Here we explain what each type covers and excludes as stated in the official documents, what the deductible means, and how to choose the right policy.
What is the difference between comprehensive and third-party insurance in brief?
These are the main differences as stated in the Saudi Central Bank documents; the details follow in the next sections:
| Item |
Third-party |
Comprehensive |
| Status |
Compulsory |
Not compulsory; includes third-party liability cover |
| Physical and material damage to third parties |
Covered within the policy limits |
Covered as per the unified policy |
| Damage to your car in an accident you cause |
Excluded |
Covered after deducting the deductible |
| Fire, theft, floods and hail |
Not covered for your car |
Included |
| Towing your damaged car and storing it |
Not provided for |
Included up to the amount stated in the schedule |
| Death or injury of the driver |
Excluded |
An optional cover offered before the policy is issued |
What does third-party (compulsory) insurance cover?
The Unified Compulsory Motor Insurance Policy sets the minimum limit of civil liability cover towards third parties. If an accident occurs within the borders of the Kingdom and causes damage that is not excluded, the insurer compensates the third party for what the insured, the driver or the person responsible for the accident is liable to pay for:
- Physical damage to the third party inside or outside the vehicle: death or physical injuries, including total or partial disability, whether permanent or temporary.
- Material damage to property belonging to the third party.
- Expenses borne by the third party due to damage not excluded in the policy.
A third party is anyone who suffers damage that is not excluded, other than the insured or the driver responsible for the accident; so this insurance protects others from your mistakes and does not repair your car. Subject to the exceptions, the insurer may not refuse to compensate the injured party because of a violation committed by the driver, but it keeps the right to recover from them in cases set out in the policy, such as driving against traffic, running a red light, and driving without a licence suitable for the type of vehicle.
What does third-party insurance not cover?
Cases the unified policy excludes from compensation include:
- Loss of or damage to the insured vehicle, property of the insured or the driver, and goods carried in it.
- Death or physical injury of the insured or the driver.
- Using the vehicle in races or to test its speed or power, and car drifting.
- A deliberate accident, or giving inaccurate information or concealing material facts in the insurance proposal form.
- Fines and financial penalties, and the driver fleeing the accident scene without an acceptable reason.
- Driving under the influence of drugs or alcohol, and natural disasters such as hurricanes, earthquakes and floods.
What does comprehensive motor insurance cover?
According to the Comprehensive Motor Insurance Rules, the company compensates the insured for any risk causing damage or loss to the vehicle, including fire, theft, lightning and natural disasters such as floods and hail, in addition to third-party civil liability as per the unified policy. Compensation works as follows:
- Partial loss: the company bears the cost of repair at the repairing party stated in the schedule (the agency or an approved repair shop), and the cost is determined by the competent entity in charge of motor accident damage appraisal.
- Technical total loss (a car that cannot be repaired to a state legally fit for driving) or economic total loss (repair is costly according to the percentage agreed in the schedule): compensation is the sum insured without deducting the company's expenses.
- The company does not deduct any amount from the compensation for the use or wear of the vehicle before the accident.
- Towing the damaged vehicle and storing it after a covered accident, up to the amount stated in the schedule.
- If another party caused the damage, your insurer compensates you first and then claims against that party or its insurer.
Before issuing the policy, the company must offer you optional covers: renting a replacement vehicle, roadside assistance, death, injuries and medical expenses of the driver or named driver, and accidents outside the Kingdom; any you decline become excluded.
What does comprehensive insurance not cover?
The main exclusions in the rules include:
- Driving without a licence suitable for the type of vehicle, or with a licence that was withdrawn or has expired unless it is renewed within the set period.
- Compensation that is less than or equal to the deductible stated in the schedule.
- An accident while the vehicle is driven by someone other than the driver or the named driver.
- Manufacturing defects, and damage resulting from use or from mechanical or electrical malfunctions.
- Damage to or theft of tyres, rims, wheel covers or exterior mirrors, unless it happened at the time of a covered accident.
- Theft caused by leaving the vehicle running, leaving the keys in it, or not closing the windows and locking the doors.
- Accessories not fitted by the manufacturer, unless their type and value are explicitly stated in the policy.
- Car drifting, running a red light or driving against traffic, if the competent body's report proves it caused the accident.
- Driving in desert areas and on unpaved roads unless inside the city.
The company and the insured may agree to waive any exclusion unless that conflicts with the law, so ask about the ones that matter to you before signing.
What is the deductible in comprehensive insurance?
The rules define the deductible as the amount borne by the insured for any claim as stated in the policy schedule, and they control how it is applied:
- It is set by the insured in agreement with the company.
- It applies only to damage to the vehicle, not to third-party civil liability claims.
- It is calculated in proportion to the driver's share of liability if they are partly liable, and it is not charged if they are not liable according to the report of the competent body attending the accident.
- It applies once per accident, even if several claims result from it.
- It stays fixed throughout the policy period, whatever the type of accident or the value of the compensation.
In practice, it is what you will pay out of your own pocket in every accident you are liable for, so compare offers by it as well, not by the policy cost alone.
How do you choose car insurance that suits your car and your use?
The decision depends on whether you could bear the cost of repairing or losing your car yourself, so review these factors:
- The car's age and value: losing a new or high-value car is harder, and comprehensive cover compensates at the sum insured in a total loss; so make insurance part of your budget as in the new car buying guide.
- A used car: insurance does not cover manufacturing defects or malfunctions, so inspect it before buying and read our vehicle inspection tips before buying a used car, and make sure the sum insured reflects its fair value.
- Financing: if the car is financed, ask the finance provider which type of insurance the contract requires before signing; to compare the two ways of paying, read buying a car with financing or cash.
- Who drives the car: comprehensive cover applies to the insured and relatives such as parents, spouse, children and siblings, the domestic worker or someone working for the insured under an employment contract, and the named driver in the schedule; so add any other driver.
- How you use it: if you go on desert trips, ask about the exclusion of desert roads, and remember that accidents outside the Kingdom are an optional cover.
What should you check in the policy schedule before you pay?
The policy schedule is an integral part of the policy, so check:
- Insured and vehicle details, and match the chassis number and plate with the vehicle registration card.
- The type of cover, not the marketing name; the rules forbid describing third-party products with additional benefits as comprehensive insurance.
- The coverage period, with its start and end dates and times.
- The sum insured, the deductible, and the percentage at which the vehicle is considered an economic total loss.
- The repairing party (agency or approved repair shop) and the towing and storage cover limit.
- Named drivers, and the use restrictions and purpose of use.
- The optional covers you accepted or declined.
- Additional vehicle details, such as modifications and where it is parked at night, and make sure they are correct; and notify the company of any change in material facts within the set period.
These provisions may be updated, so confirm the latest version on the official website of the Insurance Authority, and the terms of your policy with a licensed insurance company.
Frequently asked questions about comprehensive and third-party car insurance
- If someone else hits me and I only have third-party insurance, who repairs my car? You are the third party under the at-fault driver's policy, so their insurer compensates you for the material damage as per the unified policy. If you are at fault, your policy does not cover your car.
- Do I need two policies with comprehensive insurance? The rules state that comprehensive insurance also covers civil liability towards third parties as per the unified policy, so it combines both protections in one policy.
- Is a third-party policy with additional benefits considered comprehensive? No. The rules forbid naming or describing such products in any way as comprehensive insurance, so read the written covers, not the product name.
- Does third-party insurance cover flood or fire damage to my car? No, it does not cover your car at all, and natural disasters are among its exceptions. Najm requires comprehensive insurance on the vehicle to report an accident caused by natural disasters or fire.
- Can the policy be cancelled when I sell the car? Yes. Transfer of the vehicle's ownership is one of the cancellation cases under both policies, along with cancellation of its registration and the existence of an alternative policy, and the insured is refunded the amount due for the remaining period according to the calculation method set in the policy.
In short: third-party insurance is the compulsory minimum that protects others from damage caused by your vehicle, and comprehensive insurance adds protection for your own car in return for a deductible you agree on. Choose according to your car's value, its financing and how you use it, and read the policy schedule before you pay. If you are looking for your next car, you can browse the cars available at Saleh Cars Group.