Basic Coverage and Optional benefits in motor comprehensive and third party insurance contracts

Standard Motor Insurance Policy is  standard policy that contain the minimum limit of a motor insurance contract in the local market which focus on transparency and clarity between the parties to limit the differences between the interpretations of the clauses of the contract.

Qais Al Suhi: Standard Motor Insurance Policy Protects the Rights of  Policyholders

Qais Said Al Suhi, Director of Audit and Financial Analysis Department, Capital Market Authority said the standard motor insurance policy includes insurance coverage and additional benefits provided by the insurance companies with the aim of protecting the rights of policyholders for further clarity and transparency beside additional optional benefits that differ according to the requirements of customers and their desire to benefit from such insurance products.

He said to radio program “Our Life and Insurance” broadcasted by Muscat FM that the importance of the standards motor insurance policy comes from its effect on a large segment of policyholders due to the importance of motor insurance in the Omani insurance market as the share of gross insurance premiums is about 33% according to the indicators of the sector last year and has special importance in the local and regional levels owing to the vital role of motor vehicles in the daily activities of individuals and commercial and recreational activities.

Al Suhi talked about the insurance application pointing out the owner of the vehicle can specify the type of insurance that provides adequate coverage for the vehicle with two options, third party insurance or compulsory  insurance which indemnify the damage caused to the third parties such as death or bodily  injury or financial damage and treatment expenses. It also covers treatment costs for the party who caused the accidents but not the death or indemnity for the party who caused the accident. However, the policyholder may add optional benefits in consideration for additional amount such as personal accidents schedule, natural calamities, fire, theft and intentional acts of third parties.

On the comprehensive  insurance Al Suhi said it includes all the damage to the third party, loss and damage except the place of work, personal accidents appendix. The owner of the vehicle can add optional benefits in consideration for additional amount for each service. There are many optional  benefits the policyholder can add including a clause on modifications and accessories  on the vehiclewhich are legally permitted. The policy allow the policyholder the right to specify the persons who are allowed to drive the vehicle as optional right without being limited by specific number, however the insurance company has no right to refuse settlement of claim on the pretext that the driver is not listed in the persons allowed to drive the vehicle.

Al Suhi added that the optional benefits the policyholder of the third party insurance “compulsory insurance” can add to cover the risks to the vehicle  as personal accidents appendix such as death and indemnity for bodily injuries, civil liability of third parties in the place of work, natural calamities on the body of the vehicle  as well as  insurance against fire, theft, burglary  and intentional acts of third parties (in case of no use only), civil liability on third parties during operation in the work place. Each benefit will cost additional amount.

He pointed out that the policy includes definitions of the expressions used in it such as natural calamities which include flooding, wadis, cyclones and hurricanes, lightening and hailstones. The equipment used in construction work but not placing loads thereon.Consequential loss means indirect loss not resulting from the accidents but occurs later due to the damage to the insured.

Murtadha Al Ajmi: Professional Conduct Obligates the Insurance Companies to explain and clarify to the applicant for insurance without ambiguities

Murtadh Ali Al Ajmi, General Manager of Oman Insurance Company said there are numerous aspects the parties of the insurance contract must take care of while signing the contract.

He added that the applicant for insurance service must, prior to commencing, know the rights that protect the applicant adding that there are clear legislations made by the CMA that focus on professional conduct of insurance companies and integrity.

He pointed out that the professional conduct obliges the insurer to explain to the applicant without ambiguities or misleading to enable him to chose the right and appropriate insurance as the insurer well knows the coverage, terms and conditions and laws enacted by the regulators.

Al Ajmi said the insurance company must provide advice to the applicant and employ competent cadres who can clearly communicate with the customer.

Al Ajmi said the customer or applicant for the service  mustknow the types of insurance and the difference between them and the additional benefits. For example there is compulsory insurance that protects  only the third parties on the road  but not the family of the person who causes the accident or the vehicle which is the first type. The second type is the compulsory insurance  with added personal accidents appendix  such as damage to third parties due to the accident caused by the driver of the vehicle and lastly there is comprehensive insurance which covers personal accidents appendix in the Sultanate which is one of few countries that added this appendix which comes automatically in the insurance contract.

Al Ajmi said there are certain additional benefits that can be requested by the applicant in consideration for additional amount, for example, if the age of the vehicle is  one or two years and   an accident occurred I can buy repair in the agency  service.  There are also other  benefits such as transporting the vehicle without specifying a distance as well as insurance of accessories, indemnification for consequential loss for every day. There is also the benefits of automatic renewal  which can be bought for additional amount in addition to Diya (blood money) amount resulting in case of more than one death in the accident. 

Hayatnah Wal Tameen “our life and insurance” is presented  by Moosa Al Farei on Muscat FM at 1 PM every Thursday in collaboration with the CMA.