When a person offers his insured vehicle for sale, and another person buys it, the insured owner of the vehicle must submit to the insurance company a request to cancel the insurance policy of the sold vehicle.
In order to recover the value of the remaining subscription from the insurance premium, according to the terms and conditions of the policy. How is the value of the amount recovered from the subscription calculated, and when can the owner of the vehicle cancel the compulsory insurance policy ?!
Insurance coverage of the mandatory insurance policy
The insurance company is obligated to compensate others for the physical or material damage to it or its property and the expenses resulting from the traffic accident caused by the insured vehicle inside the Kingdom, with a maximum of 10,000,000 SAR during the period of validity of the policy, except for the damage excluded from the coverage in accordance with the terms and conditions of the policy, This is in exchange for the insured paying the agreed-upon value of the insurance company.
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When can compulsory vehicle insurance policy be canceled?
The insurance company or the insured person can cancel the insurance policy after its issuance in only three cases, according to the unified compulsory vehicle insurance policy, as follows:
Cancel the vehicle’s record, whatever the reason.
Transfer ownership of a vehicle to another owner, such as selling it to another person.
Purchase a new insurance policy that covers the remainder of the policy to be canceled.
Is it possible to recover part of the subscription amount for the compulsory insurance policy?
If any of the previous cases materialize, the insurance company is obligated to return the amount due for the remainder of the policy, whereby the refund is made as follows:
The company may not charge more than 25 Saudi riyals as administrative fees for returning the amount to the customer.
The process of calculating the remaining amount owed to the insured for the remaining period of the insurance coverage period is as follows:
The number of days remaining (the number of elapsed days is subtracted from the days of insurance coverage), then dividing the result by the number of days of insurance coverage in full, then multiplying the result by subscription minus administrative fees
The remaining amount that must be refunded to the customer = 365 – days consumed / 365 x subscription after deduction of the administrative fee.
Depositing the remaining amount of the insurance subscription in 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 notice to cancel the document.
The company, the insured and the driver remain bound by the provisions of the insurance policy regarding the liabilities arising before their cancellation.
In the event that the insurance policy is canceled due to the availability of one of the cases that enable the insured or the insurance company to cancel the insurance policy, the insurance company is obligated to return the amount due for the remainder of the policy, but it is not obligated to return this amount if there is a claim related to the policy and the vehicle itself increases Its value is equal to the value of the amount supposed to be returned according to the above calculation method.
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