How can the vehicle owner cancel the compulsory insurance policy?

The Saudi Arabian Monetary Agency (SAMA) stated that the vehicle owner can submit a request to the insurance company to cancel the compulsory insurance on the vehicle, and to recover the remaining subscription amount from the insurance premium.

The agency said that the company or the insured can cancel the insurance policy after its issuance in only three cases, when the vehicle record is canceled for any reason, or the ownership of the vehicle is transferred to another person, or if a new insurance policy is purchased that covers the remaining period of the policy to be canceled.

And it indicated that the insurance company is obligated, according to the terms and conditions of the policy, to return the amount due for the remaining period of the policy, within three working days from the date the company received the notice of policy cancellation.

SAMA added that the insurance company is not obligated to return the amount due for the remaining period of the policy, in the event that there is a claim related to the policy and the vehicle itself, whose value exceeds the value of the assumed amount.

The process of refunding the amount to the customer is as follows:

* The company may not charge more than 25 Saudi riyals as administrative fees for refunding the amount to the customer.

* The process of calculating the remaining amount due to the insured for the remaining period of the insurance coverage period is as follows:

– The number of remaining days (the number of elapsed days is subtracted from the days of insurance coverage), then the result is divided by the number of days of full insurance coverage, then the result is multiplied by subscription minus administrative fees

The remaining amount that must be refunded to the customer = 365 – spent days / 365 x subscription after deducting administrative fees.

* Depositing the remaining amount of the insurance subscription into the customer’s bank account by transferring to the International Bank Account Number (IBAN).

* The deposit is made within three working days from the date the company receives the policy cancellation notice.

* The company, the insured and the driver remain committed to the provisions of the insurance policy regarding liabilities arising before its cancellation.