MUSCAT: New amendments in the motor insurance law will lead to safe driving and reduction in the number of accidents, said road safety and automobile industry experts.
According to the new amendments, even if you have not lodged a claim during the insurance policy period, you are still eligible to get a No Claim Discount (NCD), which effectively is a certain reduction in the premium of the policy, during the time of its renewal.
“In the previous version of the law, the NCD was present. However, it was not defined properly or mentioned in the policy form. Now, the definition is clear. Also, a clear definition of other terms, for example, ‘Natural Disaster,’ ‘Trailer,’ ‘Prime mover’ etc. avoid any ambiguity,” Philip K Philip, group chief executive officer of the Muscat Insurance Company and Muscat Life Assurance Company, said.
On Sunday, the Capital Market Authority (CMA) had issued the new unified motor insurance policy with amendments.
Welcoming the news, Mark Pudwell, training manager at Competence HR, said the move brings Oman on par with European countries, that have been offering NCD to drivers who don’t lodge any claim on their car insurance.
“This often means that those older and usually more experienced drivers are rewarded for their careful driving practices. However this should go hand-in- hand with higher insurance premiums for young and new drivers. This provides an incentive to young drivers to be safe on the roads and accrue an NCD,” Pudwell said.
Jaison Mathai, senior marketing manager at Toyota in Muscat, also said this will definitely prompt safe driving on the roads.
“However, such kind rewards should be publicised well and reach each and every driver. I have heard about this practice in many other countries. Good that Oman is also going to make it happen. Good drivers should be rewarded with discounts in premiums and this can make others follow safe driving on roads in Oman,” Mathai added.
Speaking about the new version of the unified motor insurance policy, Sheikh Abdullah Salim Al Salmi, executive president at the CMA, said the new amendments have been announced seven years after the issuance of the policy in 2008 as a standard form of insurance contract with minimum limits in the contract.
Quoting last year’s insurance indicators, the CMA official said a unified motor insurance policy affects the greatest segment of policyholders as motor insurance represents about 44 per cent of policy holders in the Omani market.
If you have not lodged a claim during the insurance policy period, you are eligible to a certain reduction in the premium at the time of renewal
While explaining the new amendments further, Muscat Insurance Company’s Philip said the new version has provisions offering an increase in personal accident benefits, a hike in the additional benefit limit for “transporting and safe guarding the damaged vehicle” and also slashing excess amount of payments significantly, which is the main salient feature of the new unified motor insurance law.
“At present the personal accident benefit claim is limited to OMR10,000. The amendment has the option to increase it to OMR15,000, OMR20,000 or OMR25,000,” Philip said.
According to Philip, the new amendment has substantially reduced the excess amount, especially for light commercial vehicles (LCV).
“The excess amount has been reduced substantially—especially for light commercial vehicles. The LCVs are now split into two categories. Non-driving school and non-rent-a-cars fall in one category. In the second category, rent-a-cars and driving school vehicles are included.
The non-driving school/non rent-a-car segment excess has been reduced from OMR600 to OMR150 for undeclared drivers below 25 years. Similarly, other excess under this segment has gone down to the tune of 20 per cent to 50 per cent of what it was before,” he added.
The amended law also has a new provision for increasing the additional benefit limit for “transporting and safe guarding the damaged vehicle.”
According to the unaudited financial statements of the CMA, the insurance sector in Oman has posted growth in the gross premium underwritten in 2015.
The underwritten direct premium stood at OMR446 million; reflecting a growth of 11 per cent, compared with OMR400 million in 2014. The data quoted by the Oman News Agency pointed out that despite the growth of the gross premiums written in 2015, growth rates have varied among insurance branches.
Most insurance branches posted growth during the year except for three branches, which experienced a decline in varying degrees.
Other insurance agencies saw high growth rates (48 per cent) and the biggest decline was recorded by engineering insurance (6 per cent).
The data pointed out that health insurance continued its growth and came on top of the other products in terms of growth rates, which stood at 30 per cent in 2015, compared with 2014.
Health insurance came second in terms of the gross premiums underwritten in 2015 with 24 per cent. Automobile insurance topped the list of other insurance with a 37 per cent growth rate.
The net direct premium underwritten in 2015 stood at about OMR249 million, compared with OMR222 million during the same period in 2014.
It should be noted that the growth of total premiums stood at 12 per cent, compared with 2014.