Is insurance just a big pot into which all insured members are put equally, or should individual behavior play some role in setting rates? According to this Arab News article, auto insurance companies in Saudi Arabia are going to be looking at the driving records of their insured to set rates. When establishing how much to charge, the companies will now start looking at the history and number of accidents, traffic infractions, and who was at fault. This practice seems pretty logical to me and is the norm in most Western countries.

Companies with fleets of cars are concerned that a few bad drivers in their employ may raise their rates. Well, yes… that’s why they should be paying attention to how their employees drive. If they’ve bad drivers on their employment rolls, then they should get rid of them, not expect the rest of the world to put up with and pay for their transgressions.

Car owner’s road behavior to determine insurance premium

JEDDAH: Saudi vehicle insurance companies intend to create a record of accidents involving each motorist in the Kingdom to determine fitting insurance rates. Najm for Insurance Services takes a leading role in this process. The company will implement “Najm Net” this month.

The system creates an insurance record for each vehicle owner. It will comprise accidents and damages that the owner of a vehicle incurred during the validity of his insurance policy with one of the insurance companies in the Kingdom.

“This will provide insurance companies with a record for each of their clients, containing the number of traffic violations, the recurrence of accidents and the proportion of driver error,” Badr Al-Ali, CEO of Najm for Insurance Services, told a local newspaper.

Al-Ali explained that this process would determine the driver’s commitment to traffic and road safety regulations. It is a global system that has been applied in many countries worldwide.

The system would enable companies to treat each client personally and fairly. It would charge drivers an insurance fee that complies with their commitment to traffic safety rules.

Large companies which are in possession of a sizable fleet fear a possible blockage of their repeatedly errant drivers by vehicle insurance companies.

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