Buying a car can sometimes be expensive, with regular maintenance, service, taxes, and parts prices increasing as the car ages. This is the main reason why some people avoid buying a car, so leasing may be the best alternative.

You may find it difficult when you are offered a car rental contract full of insurance details, and you may feel confused and disoriented. So, if you want to rent a car from one of the car rental offices in Saudi Arabia, you must know what you should do and what you should avoid to ensure a successful agreement that protects the rights of both parties. 

What Is Car Rental Insurance?

The purpose of car insurance contracts for rental cars is for the lessor or rental company to insure those rented cars, and to preserve the rights of the lessee, which the Kingdom of Saudi Arabia works to protect.

The purpose of car rental insurance is to protect you financially, which means it covers the costs of any accidents that happen while you are renting a car, God forbid. Most rental cars include some type of coverage, which means you will pay a set amount for the damage caused by the accident, and the insurance company will cover the rest.

Car Rental Insurance Law in Saudi Arabia

The regulation of car rental in the Kingdom is attributed to the Saudi Ministry of Transport, which issued the regulations governing the activity of car rental and rental brokers, which it specified the obligations of both the lessor and the lessee and how to grant a license to rental companies.

The Saudi General Transport Authority has stressed the application of the unified electronic contract for car rental, as it comes to preserve the rights of all parties related to the contractual process, whether the lessee or the lessor.

Is car rental insurance mandatory?

Yes, the Saudi Ministry of Transport has required all car rental offices to provide insurance that covers the liability for damages caused by third parties at least, but it is not obligated to provide comprehensive insurance. Therefore, the Ministry of Transport urges the car renter to ask the car rental offices to clarify the type of insurance that covers the car and record it in the contract, and any amounts that the renter may be obligated to pay in the event of an accident, i.e. the deductible amount.

Car rental companies usually automatically cover the minimum amount of car accidents. However, if you want more coverage for a road trip or a long-term rental, you may need to purchase additional car insurance.

Types of car rental insurance

Make sure to read all the details in the insurance contract to understand what you are insured for and what you are not insured for, for example, the insurance may cover external damage to the car body but not the replacement of the windshield.

Below are the types of insurance for rental cars and details of each type.

First: Third-party insurance (third-party liability coverage)

The renter bears all costs of repairing the rented car while third-party insurance covers only damage to other parties. This type of insurance is mandatory for all rented cars in Saudi Arabia.

Second: Non-comprehensive insurance with a deductible percentage

Collision Damage Waiver is an optional insurance policy often offered for car rentals at a discount. The price of this insurance varies depending on several requirements, including the type of car being rented and the length of time it is being driven. This insurance usually covers damages resulting from loss or damage to the rental car but is unlikely to cover bodily injury resulting from a car accident.

For example, if the customer causes an accident, the car rental company will ask the customer to pay a deductible amount, which is the amount agreed upon when signing the contract with the rental office. If the car repair amount exceeds the deductible amount, the customer only pays the deductible amount, and the insurance company will cover the rest of the amount.

Third: Additional insurance (comprehensive insurance)

In this case, the renter is exempted from paying any amount in the event of an accident. Some car rental companies offer an additional comprehensive insurance option that extends the damage coverage, meaning that you are not required to pay any amount in the event of an accident and the insurance company will bear full responsibility for it, in addition to covering the glass, tires, underbody, etc.

Frequently Asked Questions About Car Rental Insurance

1. Which insurance should I choose when renting a car from a company or office?

Insurance terms and terms vary from rental company to rental company, so read the description and content of each option and be sure to compare the types and coverage of the car before choosing. For peace of mind, consider purchasing additional insurance that ensures your deductible is as low as possible in the event of any damage to the car.‍

2. What are the cases in which rental car insurance is excluded?

• There is no report from Najm or traffic to prove the accident.
• Driving under the influence of alcohol or drugs.
• Driving a car by a person not authorized in the contract.
• The accident occurred after the end of the contract period.
• The accident occurred outside the Kingdom of Saudi Arabia.
• Using the vehicle for purposes other than those for which it was rented.
• The car was stolen due to the renter's negligence or was stolen while running.
• Accidents resulting from traffic violations.‍

3. How do I legally act if an accident occurs while using a rental car?

• Contact Najm to obtain an accident report.
• Document the accident and damage with photos.
• Notify the car rental company and make sure to return the car immediately.
• Check the insurance terms in your car rental contract.‍

4. Is comprehensive insurance mandatory in car rental offices?

The General Transport Authority confirmed that comprehensive insurance is not mandatory in car rental offices, noting that the minimum insurance is third-party insurance.

5. Does the driver's age affect car insurance rates in Saudi Arabia?

Age is a major factor that affects the cost of insurance, as insurance companies tend to consider younger drivers to be higher risk due to their lack of driving experience, which leads to higher insurance prices for this age group compared to older, more experienced drivers.

6. How much is car insurance in Saudi Arabia?

Insurance prices range from 680 riyals to 8200 riyals depending on several factors, in addition to the choice of insurance company.

7. What is the expected time to complete the accident procedures?

The process takes 7 to 10 business days.

8. Will the insurance fee be charged to my credit card?

Many car rental companies require the customer to have a refundable deposit on his credit card, debit card, or cash. This deposit is used to cover expenses that the customer may incur, such as delays in delivering the car, extending the rental period, or traffic fines on the car. If the deposit is not used up by the time the car is delivered, it will be refunded to the customer.

Choose Peace Of Mind And Rent Your Car With Yahma

The advantages and benefits of coverage provided by Yahma Company for car insurance vary depending on the chosen insurance package that aims to satisfy and comfort the tenant, as it provides vehicle insurance that protects you and covers all physical and material damages resulting from a traffic accident, God forbid.

Yahma Company provides (non-comprehensive) insurance with a deductible percentage. In the event of an accident in which the tenant is the culprit, the tenant pays a maximum amount of 1,750 riyals, including tax.

Yahma Car Rental Company offers the cheapest car rental prices, and at the same time displays a large fleet of the most luxurious modern cars equipped with the latest safety and security technologies for all types of cars that suit all tastes and occasions. Yahma Car Rental Company offers many ways to book a car to save effort and time for its customers. You can book a car through the website or the application or by visiting one of our branches spread across the Kingdom.

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