Kuwait sets new rules for car insurance

Your insurance company can no longer quietly raise your car’s value after you’ve signed the policy, unless you asked for it.

That’s one of several changes in a new resolution from Kuwait’s Insurance Regulatory Unit, which has rewritten the rules for comprehensive vehicle insurance policies. The decision touches almost everything in your policy: how your premium is worked out, what happens if your car is damaged, who pays for repairs, and what counts as a total loss.

If you have comprehensive cover, or you’re about to buy a car and will need it, this is worth a careful read. It comes not long after the move to digital insurance, which we covered when Kuwait ended paper car insurance in October.

What exactly is changing?

The resolution is called Resolution No. 53, and it covers how insurance companies set prices, value cars, pay compensation, and write policy conditions for comprehensive insurance. Comprehensive cover is the policy type that pays out for damage to your own car, not just the other driver’s.

The regulator’s goal, as stated in the decision, is to strengthen the rights of policyholders and make the relationship between drivers and insurance companies fairer and clearer.

Under the new rules, insurance companies must base your premium on the fair or market value of your vehicle at the time the policy is issued. That means its price should reflect the car’s real condition, type, year of manufacture and specifications, not a figure the company picks on its own.

Once a value is agreed and written into your policy, neither side can go back and argue about it later. The only exceptions are cases of fraud, hiding important facts, or wrong information being used to value the car in the first place.

No more hidden fees

This is one of the more useful protections for ordinary drivers. Insurance companies can no longer charge any extra amount, deduction or fee unless it is written clearly in your policy schedule or terms, and you approved it before the policy was issued.

Deductible amounts (the part of a claim you pay yourself) must also be clearly set out. The rules cover whether the deductible is a one-off or applies every year, and whether it’s for total loss, partial loss, or partial damage.

The resolution also blocks companies from pricing policies below the minimum set by the regulator, unless they can show a proper technical and actuarial basis for doing so. It also stops companies from offering extra add-on products outside the normal insurance agreement without official approval first.

Policies must now be written in Arabic, in clear and simple language. If any wording is unclear or could be read two ways, the rules say it must be read in favour of the policyholder, not the company.

Before you even get a policy

Before issuing your policy, the insurance company must physically inspect your car, photograph it, and record its condition in a clear damage sheet. This report has to be ready in writing before the policy is issued, not after a claim is made.

This should, in theory, stop disputes over pre-existing damage once something goes wrong later. If you’ve recently gone through the related move to online systems, our step-by-step guide to renewing car registration online covers a similar shift towards digital, paper-free processes.

So what happens when my car needs repairs?

Your policy must now state clearly where repairs will happen: at the dealer or franchise workshop, or at other authorised repair shops.

If repairs happen at the dealership, you must be told the technical costs upfront, unless a detailed report shows a reasonable technical reason why costs differ.

If repairs happen outside the dealer network, the company must give you a list of its approved and contracted workshops. The company stays responsible for the quality of that repair work. You cannot be charged extra costs, or made to pay for parts beyond the standard agreed parts, unless you choose a higher-cost option yourself, in writing, after being clearly told about it and agreeing to it.

What counts as a total loss now?

The resolution limits when a car can be declared a total loss, based on technical and economic criteria. Before a claim file can be closed as total loss, it must include a documented technical report assessing the car’s condition, the cost of repairing it, and whether repair is realistic at all.

Compensation in both total and partial loss cases must be calculated according to the sum insured, the policy’s terms, any deductibles and depreciation rates, and the market value at the time of the loss or theft. Both the insurance company and the vehicle owner share responsibility for making sure this process is handled fairly.

There’s also a rule for cars that had damage from before the current claim. If a car isn’t fully repaired after an earlier accident, whether in part or in full, the company still has to pay out the same deductible amount if the car is later lost or destroyed, though it keeps the right to deduct that deductible from the final compensation.

What this means if you’re driving in Kuwait

For citizens and expats who hold comprehensive cover, this should mean fewer surprises at renewal time and fewer arguments if you ever need to make a claim. The ban on hidden fees and after-the-fact value increases is the part most drivers will notice first.

If you’re shopping for a car or about to register one, it’s also worth knowing your rights under these rules before you sign anything. Our recent guide on registering a car in Kuwait and our piece on who’s responsible for fines when you drive someone else’s car both sit alongside this change, since all three affect how you deal with your car and its paperwork day to day. You can find more of our coverage on the Local page.

What’s not yet confirmed is exactly when insurance companies must apply these rules to existing policies, and whether there’s a grace period for policies already running. We’ll update this once that becomes clear.

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