We explain what kind of insurance you need to buy in Saudi Arabia and other types of compulsory insurance for expats and their businesses is available in Saudi Arabia.
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 foreigners can choose from various products available to individuals and businesses. This guide explains what you need to know about insurance in Saudi Arabia and includes the following sections:
- Overview of insurance in Saudi Arabia
- Compulsory forms of insurance in Saudi Arabia
- Optional forms of insurance in Saudi Arabia
- Commercial insurance in Saudi Arabia
Insurance Overview In Saudi Arabia:
Insurance is a significantly fast-growing industry in Saudi Arabia. It is expected that this increase will continue as the population grows and more foreigners will migrate.
The structure of Saudi Arabia’s insurance market is slightly different from that of other Gulf countries. Unlike neighboring Qatar, which a few large insurance companies dominate, Saudi Arabia has many small public companies.
There are almost thirty-four Islamic insurance cooperatives in Saudi Arabia. There are also significant international companies offering policies that include health insurance and life insurance. Tunisia (national) and BUPA (international) are two major firms in terms of market share. Market penetration for insurance is still low at 1.4% in Saudi Arabia in 2017.
The Saudi Money Authority (SAMA) controls the country’s insurance sector. There are no Saudi Arabian insurance associations or trade associations.
Compulsory Insurances An Expat Should Know
Already, one of Saudi Arabia’s most important insurance markets, motor insurance, is forecast to grow in the coming years. The main reason is that Saudi women can now drive legally.
Under Saudi Arabian law, you must take car insurance instead of the driver, including the owner or authorized driver. All vehicles should have at least third-party liability insurance. It covers all costs incurred by a third party in any event.
You can buy additional coverage, e.g., against loss or damage to your vehicle, up to a specific price. It is usually SAR 10,000. Alternatively, you can purchase fully comprehensive insurance that covers all costs, including fire, theft, and accidents that were your fault.
The maximum liability claim on all Saudi policies is usually 10 million SAR. Annual premium costs will depend on the price of the vehicle and the driver profile. Approximately third-party liability starts at approximately SAR 800 (approx. 5 215) and fully coverage at around 2500 SAR.
Health insurance is a must for all residents of Saudi Arabia, and it is the largest insurance market in the kingdom. While Saudi nationals have free public health insurance, foreigners must take out private health insurance.
Employers often arrange this insurance. Many private insurance companies in Saudi Arabia offer schemes that cover more than one employee. However, if your Saudi employer does not cover you or wants higher coverage than the one provided, you can purchase an individual policy. Private packages vary but usually cover essential GP and hospital treatment, emergency treatment, and maternity expenses. However, you need coverage for things like dental care and specialist treatment.
Saudi Arabia has a mandatory participatory social security system, although it does not cover everyone. In addition to private-sector employees, some public sector employees pay monthly insurance taken directly from their salaries.
Self-employed workers can choose to enroll in a social insurance scheme voluntarily. Social security payments in Saudi Arabia go as follows:
- Your pension
- Disability benefits
- Survival benefit
- Work-related injury costs
- The benefit of unemployment
Optional Forms Of Insurance An Expat Should Know:
Residents can choose to insure their homes and materials against damage and loss. Most policies combine building and contents insurance. However, you can usually guarantee them separately if you wish. Landlords in Saudi Arabia mainly include building insurance in rental agreements. However, they will rarely have content insurance.
Insurance usually covers property damage in addition to fires, floods, earthquakes and natural disasters. If you are a landowner, you may purchase additional coverage, such as third-party liability or loss of rental income.
Like most countries, the cost of your home insurance in Saudi Arabia will depend on what is getting covered, any additional coverage involved, and the level of risk to the property.
People who want to plan for retirement or want to protect their loved ones in the event of death or life-threatening disability can buy life insurance in Saudi Arabia.
Although many national insurance companies do not offer life insurance in their products, many international companies can take a policy following Shariah. You can also transfer a life insurance policy to your country.
In addition, some Saudi private sector companies offer life insurance as part of their benefits package. You can tailor policies to your individual needs. The company will usually make unilateral payments that may cover costs such as:
- Your spouse’s living expenses
- Expenditure on the education of dependent children
- Maintenance costs if you have a permanent disability.
Read More: Can Expat Use KSA Public Transport System?
If you live in Saudi Arabia and want to travel abroad for personal or work purposes, you may consider buying travel insurance. Most insurance companies offer this, so shop for a good deal.
Travel insurance can cover a variety of expenses, including:
- Cancelled or missed flights
- Lost or delayed equipment
- Treatment costs;
- Emergency accommodation costs in case of overseas
- Third-party liability costs
Premiums depend on the coverage limit. You should check the extent of medical coverage as this often includes only limited emergency treatment. In addition, global health insurance can cover many medical expenses, so make sure you don’t buy the same thing twice.
Also, check for exceptions. For example, extreme sports activities or high-risk outings are usually not included unless you pay extra. Costs can be anything between SAR 50 and SAR 1,000 Plus, depending on what you cover. It will also depend on:
The length of insurance coverage can range from a few days to an annual or bi-annual coverage.
It covers the risks associated with unforeseen accidents. Because social insurance does not cover everyone in Saudi Arabia, many people are vulnerable in the event of a severe accident.
Coverage may include:
- The cost of being unable to work, either short-term or long-term, due to an accident
- Treatment costs,
- It includes expenses related to death in the event of a fatal accident.
Types Of Insurance An Expat Should Know Before Starting A Business:
If you are an expat and run a business in Saudi Arabia or work in a self-employed or freelance capacity, then you should buy insurance to cover business risks. Most insurance companies offer different corporate packages to suit different needs. Types of insurance include:
It includes “Public liability insurance” against third-party claims. It is compulsory for some businesses. You can also buy professional liability insurance to protect you from lawsuits from your professional activities or decisions.
It is not mandatory but is worth taking out if you want to protect your business premises or have a certain amount of merchandise or stock. It can also get increased to cover business disruption costs.
Insurance companies also provide employee insurance packages to large firms, including health insurance, accident insurance, and group life insurance.
Motor insurance is compulsory for all motor vehicles, whether used for business or personal purposes. Corporate motorists with more than one vehicle can insure them under flat insurance.
Shop Owners Insurance:
Some brokers offer shop owners a comprehensive package including property and contents, liability, and employee coverage. Expenses will depend on the size and cost of the business.