An alliance of 150 car rental companies to confront the “arbitrariness” of insurance companies in Saudi Arabia

150 companies in the transport sector in the Makkah Al-Mukarramah region (western Saudi Arabia) are entering serious negotiations to form the first unified coalition, during these days, with the aim of solving the insurance problem that stands in the way of the sector’s investments, represented by the slow procedures of insurance companies in ending repair operations, and the high prices of these companies on Vehicles to be insured, which causes financial losses to the owners of these companies.

The meeting of the Transport Committee at the Chamber of Commerce and Industry in Makkah Al-Mukarramah, which was held the day before yesterday, approved the need to work on drafting a unified insurance contract that serves transport companies in general, with the importance of inviting representatives of insurance companies to contract with members of the consortium. To protect their investments, to speed up procedures for awarding compensation and repair fees for insured vehicles, and to motivate active insurance companies to adhere to insurance provisions.

According to Suleiman Al-Harbi, Vice-Chairman of the Transportation Committee at the Makkah Chamber, the committee will start preparing a unified insurance contract that serves transport sector companies, in coordination with the General Motors Syndicate to invite the best insurance companies, with the aim of protecting the investments of the transport sector in Makkah Al-Mukarramah, and obtaining the best insurance offers.

Qabalan Al-Amiri, a member of the Transportation Committee at the Makkah Chamber of Commerce and an investor in the transportation sector, said that the problem lies in the procrastination of insurance companies in repairing accident-prone vehicles for a period of more than 30 days, due to the companies’ desire for inspection, documentation and the length of procedures and insurance companies’ contracts with limited workshops and maintenance centers. Which led to overcrowding and their inability to repair vehicles in a reasonable period.

And Al-Amiri added that the delay in workshops and maintenance centers and the slow procedures of insurance companies cost the public taxi companies ten thousand riyals for each idle vehicle in a competitive market, especially in a city the size of Makkah Al-Mukarramah, which is experiencing the seasons of Hajj and Umrah and the month of Ramadan, where the demand for transportation rises significantly from The rest of the Saudi cities, which puts companies in a big dilemma because they are unable to cope with the high demand.

A member of the Transport Committee of the Makkah Chamber of Commerce pointed out that insurance companies refuse to repair damaged cars that are covered by insurance in other than the workshops and maintenance centers contracted with them, at a time when the owner of the company can repair the vehicle in less than a week, which is a logical period in the repair process, explaining that there are two companies that monopolize The car insurance market with the increase in insurance fees against the other from 1200 riyals to 2500 riyals, indicating that the taxi market operates in more than 150 companies that own more than seven thousand taxis.

The Riyadh Chamber had previously organized a meeting with investors in the transport sector to review the expected plan to implement the process of merging the companies and institutions of the sector into one company, with the aim of developing the sector and ensuring that it keeps pace with the development of the various transport sectors in the capital, Riyadh. The meeting presented the future outlook resulting from the merger process, which will achieve more developments in the sector and reduce expenses, in addition to providing the best services, taking into account all aspects related to the merger plan, to open the way for the largest number of companies specialized in this field to enter according to multiple advantages, provided that The proposed company will support the existing investors, while raising the operational capacity and developing the services provided.

Returning to the movements of the Makkah Chamber to launch the first coalition in this sector, Muhammad al-Sharif, a member of the Transport Committee, said that pilgrims transport companies have a good experience in vehicle insurance that taxi companies can benefit from, which is writing an insurance contract obligating insurance companies to repair vehicles in a certain period. With the imposition of fines for unjustified delay, this procedure frees both parties from delay, and reduces the losses incurred by transport companies as a result of delaying their vehicles due to repair operations that may be simple.

Regarding the Chamber’s role in solving investors’ problems, Saad Jamil Al-Qurashi, Chairman of the Transportation Committee and a member of the Board of Directors of the Makkah Chamber of Commerce and Industry, confirmed that the Transportation Committee is one of the most important committees of the Chamber of Commerce in terms of studying investment problems and obstacles, due to the high volume of investment in the sector, the growing number of vehicles, and the entry of More than one authority supervises the organization of transportation procedures, indicating that the committee adopted a meeting with the Traffic Director of the Holy Capital to discuss the concerns and aspirations of investors in the transportation sector to reach radical solutions and study possible solutions.