We explain what insurance in Saudi Arabia you must purchase under the law, along with other forms of insurance available to residents and businesses.
The insurance industry in Saudi Arabia is not at the same level as in countries like the United States or the United Kingdom. However, the market is growing and expats can choose from a range of products available to individuals and businesses. This guide explains everything you need to know about insurance in the Kingdom of Saudi Arabia and includes the following sections:
The insurance industry in Saudi Arabia is not at the same level as in countries like the United States or the United Kingdom. However, the market is growing and expats can choose from a range of products available to individuals and businesses. This guide explains everything you need to know about insurance in the Kingdom of Saudi Arabia and includes the following sections:
- An overview of insurance in the Kingdom of Saudi Arabia
- Mandatory forms of insurance in the Kingdom of Saudi Arabia
- Optional forms of insurance in the Kingdom of Saudi Arabia
- Commercial insurance in the Kingdom of Saudi Arabia
- Insurance comparison tools in Saudi Arabia
An overview of insurance in the Kingdom of Saudi Arabia
Insurance is a rapidly growing industry in the Kingdom of Saudi Arabia. This growth is expected to continue as the population expands and more expatriates move to the country.
The structure of the insurance market in Saudi Arabia differs little from other Gulf countries. Unlike the neighboring country of Qatar, which is dominated by some major insurance companies, there are smaller Saudi companies that are publicly traded.
There are 34 Islamic insurance cooperatives in the Kingdom of Saudi Arabia. In addition, there are larger international companies that offer policies that include health and life insurance. Cooperative (National) and BUPA (International) are the two largest market share companies.
Insurance market penetration in Saudi Arabia remains low, reaching 1.4% in 2017. This compares to the Organization for Economic Cooperation and Development average of 8.9%.
The Saudi Arabian Monetary Authority (SAMA) regulates the insurance sector in the Kingdom. There are no Saudi insurance companies or commercial organizations.
The structure of the insurance market in Saudi Arabia differs little from other Gulf countries. Unlike the neighboring country of Qatar, which is dominated by some major insurance companies, there are smaller Saudi companies that are publicly traded.
There are 34 Islamic insurance cooperatives in the Kingdom of Saudi Arabia. In addition, there are larger international companies that offer policies that include health and life insurance. Cooperative (National) and BUPA (International) are the two largest market share companies.
Insurance market penetration in Saudi Arabia remains low, reaching 1.4% in 2017. This compares to the Organization for Economic Cooperation and Development average of 8.9%.
The Saudi Arabian Monetary Authority (SAMA) regulates the insurance sector in the Kingdom. There are no Saudi insurance companies or commercial organizations.
Mandatory forms of insurance in the Kingdom of Saudi Arabia
Car insurance
It is already one of the largest insurance markets in the Kingdom of Saudi Arabia, and auto insurance is expected to grow in the coming years. This is largely due to the fact that Saudi women can now legally drive.
Under Saudi law, you must insure the car, not the driver, against accidents involving the owner or approved driver. All vehicles must have at least third party insurance. This covers all costs incurred by third parties in any accident.
You can buy additional coverage, for example against the loss or damage of your vehicle, up to a certain value. Usually this is around 10,000 SAR. Alternatively, you can purchase comprehensive insurance that covers all costs, including fire, theft, and accidents that were your fault.
Generally, the maximum liability claims in all Saudi policies are 10 million Saudi riyals. Annual premium costs depend on the value of the vehicle and the profile of the driver. As a rough guide, third party liability begins with approximately 800 SAR (approximately $ 215 USD) and fully includes approximately 2,500 SAR.
Under Saudi law, you must insure the car, not the driver, against accidents involving the owner or approved driver. All vehicles must have at least third party insurance. This covers all costs incurred by third parties in any accident.
You can buy additional coverage, for example against the loss or damage of your vehicle, up to a certain value. Usually this is around 10,000 SAR. Alternatively, you can purchase comprehensive insurance that covers all costs, including fire, theft, and accidents that were your fault.
Generally, the maximum liability claims in all Saudi policies are 10 million Saudi riyals. Annual premium costs depend on the value of the vehicle and the profile of the driver. As a rough guide, third party liability begins with approximately 800 SAR (approximately $ 215 USD) and fully includes approximately 2,500 SAR.
health insurance
All residents of the Kingdom of Saudi Arabia must have health insurance and this is the Kingdom's largest insurance market. While Saudi citizens have free public health insurance, expats must obtain private health insurance.
This is often organized by employers. Many private insurance companies in the Kingdom of Saudi Arabia offer company plans that cover many employees. However, if the owner of the Saudi company does not cover it, or if you want a higher level of coverage than is available, you can purchase an individual policy. Special packages vary, but generally cover main hospital and general medical treatment, emergency treatment, and maternity costs. Coverage may be required for things like dental care and professional treatment.
This is often organized by employers. Many private insurance companies in the Kingdom of Saudi Arabia offer company plans that cover many employees. However, if the owner of the Saudi company does not cover it, or if you want a higher level of coverage than is available, you can purchase an individual policy. Special packages vary, but generally cover main hospital and general medical treatment, emergency treatment, and maternity costs. Coverage may be required for things like dental care and professional treatment.
Social insurance
The Kingdom of Saudi Arabia has a compulsory contribution-based social security system, although it does not cover all. Private sector workers, in addition to some categories of public sector employees, pay monthly insurance premiums that are deducted directly from their wages.
Freelancers can choose to voluntarily enroll in the social security plan. Social security payments in the Kingdom of Saudi Arabia are directed to:
Freelancers can choose to voluntarily enroll in the social security plan. Social security payments in the Kingdom of Saudi Arabia are directed to:
- Your pension
- Disability benefit
- The heirs benefit
- Work injury costs;
- Interest rate
Optional forms of insurance in the Kingdom of Saudi Arabia
Home insurance
Residents can choose to insure their home and contents against damage and loss. Most documents contain construction and content insurance. However, you can generally choose to lock it separately if you prefer. Landlords in Saudi Arabia will often include construction insurance in leases. However, content insurance rarely includes.
Insurance generally covers damage from fire, flood, earthquake and natural disaster, in addition to theft of property. If you own, you can buy additional coverage, for example, liability or loss of rental income.
Like most countries, the cost of insuring your home in Saudi Arabia will depend on the value of what is covered, any additional coverage included, and the level of risk to the property.
Insurance generally covers damage from fire, flood, earthquake and natural disaster, in addition to theft of property. If you own, you can buy additional coverage, for example, liability or loss of rental income.
Like most countries, the cost of insuring your home in Saudi Arabia will depend on the value of what is covered, any additional coverage included, and the level of risk to the property.
life insurance
Those who want to plan for retirement or protect loved ones in the event of life-limiting death or disability can purchase life insurance in Saudi Arabia.
Although many national insurance companies do not offer life insurance among their products, there are a number of international companies where expatriates can follow a Shariah compliant policy. You can also transfer the life insurance policy that is followed in your country.
In addition, some companies in the Saudi private sector offer life insurance as part of their benefits package. You can tailor the policies to your individual needs. The company generally pays a full amount that can cover costs such as:
Although many national insurance companies do not offer life insurance among their products, there are a number of international companies where expatriates can follow a Shariah compliant policy. You can also transfer the life insurance policy that is followed in your country.
In addition, some companies in the Saudi private sector offer life insurance as part of their benefits package. You can tailor the policies to your individual needs. The company generally pays a full amount that can cover costs such as:
- Your husband's cost of living;
- Education costs for dependent children;
- Care costs if you have a permanent disability
Travel insurance
If you live in the Kingdom of Saudi Arabia and need to travel abroad for personal or business purposes, you can purchase travel insurance. Most insurance companies offer this until you buy a good deal.
Travel insurance can cover a variety of costs, including:
Travel insurance can cover a variety of costs, including:
- Canceled or missed flights;
- Lost or delayed luggage;
- Medical expenses;
- Emergency accommodation costs in the event of an accident abroad;
- Third party liability costs
Premiums depend on your coverage. You should check the level of medical coverage, as this often includes only limited emergency treatment. Also, universal health insurance can cover many medical costs, so be sure not to buy the same thing twice.
Also, check exclusions. For example, extreme sports activities or high-risk excursions are generally not covered unless you pay an additional amount. Costs can range from 50 to 1,000 SAR, depending on what you choose. It will also depend on:
- The length of the coverage period, which can be from a few days to an annual or semi-annual coverage;
- If you want regional or global coverage
Accident insurance
This covers the risks associated with unexpected accidents. Since social security does not cover everyone in Saudi Arabia, many people are at risk in the event of a serious accident.
Coverage may include:
Coverage may include:
- The costs of not being able to work, either in the short or long term, due to an accident;
- Medical expenses;
- Costs related to death in the event of a fatal accident.
Commercial insurance in the Kingdom of Saudi Arabia
If you have a business in the Kingdom of Saudi Arabia, or work for your own account or for your own account, you can buy insurance to cover business risks. Most insurance companies offer different packages of companies to meet a variety of needs. The types of insurance include:
- Civil liability insurance: includes general liability insurance against third-party claims, which is mandatory for some companies. You can also obtain professional liability insurance to protect you from claims arising from your professional activities or decisions.
- Property insurance: not required, but worth requesting if you want to protect your business premises or have a large amount of equipment or commercial inventory. This can also be extended to cover business interruption costs.
- Employee Insurance: The law requires companies with employees to insure employees against workplace injuries. Insurance companies also offer employee insurance packages to large corporations, including health, accident and group life insurance.
- Vehicle insurance: compulsory for all vehicles, whether they are used for commercial or personal purposes. Companies with multiple vehicles may also be insured under fleet insurance.
- Store Owner Insurance - Some brokers offer a comprehensive store owner package that covers property, content, liability, and employee coverage. Costs depend on the size and value of the business.
Insurance comparison tools in Saudi Arabia
Yalla Compare, a leading comparison tool in the Middle East, will launch the insurance comparison tool in the future. Today, it contains some insurance related items that can be helpful when shopping.
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