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Insurance for Expats in Saudi Arabia

Submitted: August 2014

Fundamentally, insurance is mainly a financial service which is designed to reduce risks. An insurance product transforms the cost of your potential large liabilities or expenses into regular premiums. An insurance product “ensures” that your situation is more stable/less risky than what it would otherwise be, but it is certainly not a way to evade the liabilities you are potentially responsible for.

Do not wait for problems to arise before reviewing your insurance arrangements. Once you have a problem, it is already too late. Being poorly insured is risky whereas being over-insured is expensive.

If you are unclear about your cover or your needs whilst you are in Saudi Arabia, you might wish to check your existing insurance arrangements in your country of origin. This is important if you want to avoid double coverage.

Insurance isn’t necessarily a country-specific issue, but how much insurance you need may vary from one country to another. This is because your potential liabilities, such as medical bills, are specific to a jurisdiction.

 

Saudi insurance market

Saudi insurers are regulated by the Saudi Arabian Monetary Agency (SAMA) and are often referred to as “cooperative insurance” companies. Customer complaints must be responded to by the insurer within 15 calendar days. They may also be submitted directly to SAMA.

The Saudi insurance market isn’t the most competitive in the world, but you shouldn’t be afraid of going to a Saudi insurer. Importantly, it is advisable to shop around and compare before taking out an insurance policy (premiums, levels of coverage, no-claims discounts (NCDs), etc.).

Further information on insurance in Saudi Arabia is available on the SAMA website.

 

Home insurance

Home insurance may sometimes be referred to as “property insurance”. Your home insurance needs depend on whether you own your home, or if you rent it.

For homeowners, your home insurance policy protects you against damage to your building, and is generally required to secure a mortgage. This may cover the costs of rebuilding your property from scratch, legal fees or the costs of certain exceptional repairs. Home insurance may also cover you against third party liability if an accident happens in your home.

For tenants, home insurance can be much cheaper than home insurance, as tenants only need to be insured against their belongings and public liability if an accident happens in their home.

As for all insurance policies, it is up to you to decide how generous you want your cover to be, what the excess amounts are (“deductibles”), which unexpected expenses are covered (e.g. alternative accommodation), etc.  

Going away from home

If you expect to be away from your home for more than one month, you should let your insurer know. Failure to do so may result in a claim being rejected if something happens to your home whilst you are away.

Home insurance exclusions

In Saudi Arabia, home insurance would at least exclude the following risks:

  • Terrorism
  • War
  • Radioactivity
  • Pollution-related injuries or destruction
  • “Consequential losses”

Your policy may also exclude riots, domestic strikes and disturbance, as well as maritime risks.

 

Car insurance

Car insurance is mandatory in Saudi Arabia, and your policy must generally include at least third party liability. This should insure you against potential liabilities for third party death or bodily injury, but not damage or theft of your own car.

If you need your vehicle to have more than just third party cover, you might wish to take out a comprehensive vehicle insurance policy. Should an accident take place, you will need the accident report from the traffic police, plus any documents supporting the circumstances of the accident.

It should be noted that women are not allowed to drive in Saudi Arabia.

 

Health insurance

Private health insurance in Saudi Arabia is essential for expatriates, as Saudi Arabia is a wholly private system. Healthcare costs are not quite low overall, but the standards are comparable to those seen in Western countries.

Expatriates may consider an international cover in order to ensure coverage both in Saudi Arabia and in their home country. International covers tend to be more expensive, but they are straightforward and very helpful if you need to “bridge the gap” between Saudi Arabia and your home country. Expats who frequently move across borders are more likely to need an international cover to achieve peace of mind.

Many expats come to Saudi Arabia in order to get a high, tax-free salary. The flip side of the coin is that the picture is no longer that bright once you have accounted for health insurance, pension contributions, and other payments expats wouldn’t have had in their home country.

 

Life insurance

Life insurance, sometimes called “protection insurance”, can be particularly helpful if your family is financially very dependent on you, as it may guarantee a lump sum payment to your family if you die.

Do assess carefully the burden of retaining foreign life insurance while you are resident in Saudi Arabia. Do also check the geographical extent of your existing life insurance policy when you move across borders.

 

Business insurance

If you run a business in Saudi Arabia, you will need personnel insurance and public liability insurance.

Personnel insurance protects you in case one of your employees has an accident or an illness in connection with his/her employment duties.

Public liability insurance covers you against certain third party claims against your business. This may also include legal costs.

 

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