Car insurance is mandatory for every vehicle owner in Saudi Arabia. But many drivers still find it confusing to choose between different types of policies and insurers. This guide covers the key points about Saudi car insurance in 2026. It explains the No‑Claim Discount (NCD) system, the difference between third‑party liability and comprehensive insurance, price comparisons among major insurers, factors that affect premiums, and recent market trends. Four frequently asked questions are also included at the end. The goal is to help drivers understand their options without any promotional language.
1. Why Car Insurance in Saudi Has Changed Recently
Over the past few years, the Saudi car insurance market has undergone significant adjustments. In 2025, many insurance companies faced financial losses due to mispriced premiums and a high number of traffic accidents. As a result, insurers have started to re‑evaluate their pricing strategies. For 2026, drivers can expect premium levels to rise moderately compared to previous years. The regulatory body, the Saudi Central Bank (SAMA), continues to oversee the market to ensure fairness and transparency. Understanding these changes is the first step toward making an informed decision.
2. What Is the No‑Claim Discount (NCD) and How Does It Work?
The No‑Claim Discount (NCD) is a reward system for drivers who do not cause any accidents during their policy period. Each year without a claim, the discount percentage increases. The discount applies to the premium of the next policy. The NCD is automatically recorded in the Najm system, which is the national traffic accident platform.
The table below shows how the NCD grows over time for both third‑party liability and comprehensive policies.
| Years Without Claim | Third‑Party Liability Discount | Comprehensive Discount |
|---|---|---|
| 1 year | 10% | 15% |
| 2 years | 20% | 30% |
| 3 years | 30% | 45% |
| 4 years | 40% | 55% |
| 5+ years | 50% | 60% |
The maximum possible discount is 60% for comprehensive insurance and 50% for third‑party liability. This can significantly reduce annual expenses.
3. Important Rules About NCD That Drivers Often Miss
The NCD is linked to the driver, not the vehicle. If a person sells their car and buys another, the discount can be transferred to the new policy. However, there are time limits. If a policy expires and is not renewed within 30 days, the NCD is put on hold. If the gap exceeds 30 days but is less than 180 days, the NCD is lost for one year. If the gap exceeds 180 days, the entire NCD history is permanently cancelled. Also, if a driver causes an accident and files a claim, the NCD drops sharply – equivalent to losing two years of discount progress. Therefore, maintaining a clean driving record is the most effective way to keep insurance costs manageable.
4. Third‑Party Liability Insurance (TPL): What It Covers
Third‑party liability insurance is the minimum legal requirement in Saudi Arabia. Every registered vehicle must have at least TPL coverage. This type of policy pays for damages caused by the insured driver to other people, their vehicles, or their property. It does not cover any damage to the insured driver’s own car or injuries to themselves. TPL is suitable for older cars with low market value, for drivers on a tight budget, or for those who rarely drive long distances. The annual premium for TPL is generally much lower than comprehensive insurance.
5. Comprehensive Insurance: What It Adds
Comprehensive insurance includes everything that TPL covers, plus protection for the insured driver’s own vehicle. It covers damages from accidents (whether the driver is at fault or not), theft, fire, vandalism, and natural events like floods or sandstorms. Many comprehensive policies also offer add‑ons such as roadside assistance, a replacement car during repairs, and coverage for personal belongings inside the vehicle. Comprehensive insurance is strongly recommended for new cars, high‑value vehicles, and cars financed through a bank loan (lenders often require it). The premiums are higher, but the peace of mind is greater.
6. Price Comparison of Major Insurers in Saudi Arabia
The following table shows estimated starting prices for TPL and comprehensive policies among well‑known Saudi insurers in 2026. Actual premiums vary based on driver age, vehicle model, city of registration, and individual driving history.
| Insurance Company | TPL Starting Price (SAR/year) | Comprehensive Starting Price (SAR/year) | Key Feature |
|---|---|---|---|
| Al‑Tawuniya | 650 – 700 | 1,800 – 2,500 | Mechanical breakdown cover, digital claims app |
| MedGulf | 660 – 750 | 2,000+ | Fast claim processing, valid in Gulf countries |
| Al Rajhi Takaful | 680 – 780 | 2,100+ | Safe driving points, interest‑free installments |
| Walaa | 700 – 800 | 2,200+ | Sharia‑compliant, Mobily reward points |
| Gulf Union | 900+ | 2,500+ | Own repair shops, tailored for older cars |
These are only reference prices. Drivers should obtain personalized quotes before deciding.
7. Other Factors That Influence Your Car Insurance Premium
Apart from the NCD and the type of coverage, several other factors affect how much a driver pays for car insurance.
- Age and driving experience: Drivers under 25 years old, or those with a newly issued license, face higher premiums because they are statistically more likely to be involved in accidents.
- Driving record: Any history of traffic violations, speeding tickets, or previous at‑fault accidents increases the premium.
- Car model and age: Luxury cars, sports cars, and high‑performance vehicles cost more to repair, leading to higher insurance costs. Newer cars also generally have higher premiums than older ones.
- Vehicle usage: Using a car for ride‑hailing (e.g., Uber, Careem), delivery, or any commercial purpose increases the premium significantly. High annual mileage also raises the price.
- City of registration: Insurance prices vary by city. Riyadh has the most competition and often lower prices. Jeddah may have slightly higher premiums due to flood risks in some areas. The Eastern Province (Dammam) has competitive rates because of the industrial environment.
8. What Happens After an Accident? Steps to Follow
When a traffic accident occurs, the driver must follow a specific procedure to preserve NCD and receive proper insurance handling. The first step is to report the accident through the Najm system. This can be done via the Najm mobile app or by calling the Najm hotline (920000560). Najm dispatches an inspector to the scene to assess damages and determine fault. Only after receiving the Najm report should the driver contact their insurance company to open a claim. Never go directly to a repair shop before the Najm inspection; otherwise, the claim may be rejected. If the driver is at fault, the NCD will be reduced according to the rules mentioned earlier. If not at fault, the discount remains unchanged.
9. Recent Market Trends: Why Premiums May Rise in 2026
The Saudi car insurance market experienced a difficult period in 2025. Many insurers reported underwriting losses because premiums were set too low relative to the high frequency of claims. According to industry sources, the combined ratio (claims plus expenses divided by premiums) exceeded 100% for several companies. As a result, insurers are now adjusting their pricing models. For 2026, drivers can expect a general increase in premiums, though the exact amount varies by company and individual risk profile. This correction is intended to make the market more sustainable. Drivers with long, clean records will still benefit from NCD, but base rates may be higher than in 2024 or 2025.
10. Frequently Asked Questions (FAQ)
Q1: Can I transfer my NCD from one insurance company to another?
A: Yes. The NCD belongs to the driver, not to any specific insurer. When switching companies, simply provide the new insurer with a proof of no‑claim statement or the expiry letter from the previous policy. The Najm system also maintains the record, so the new company can verify it directly.
Q2: Is third‑party liability insurance enough for a new car?
A: In most cases, it is not recommended. Banks that finance car purchases typically require comprehensive insurance. Moreover, a new car has high value, and repairing it after an accident can be very expensive. Comprehensive insurance is the safer choice for new or nearly new vehicles.
Q3: What happens if my policy expires and I do not renew it for two months?
A: If a policy expires and remains unrenewed for more than 30 days but less than 180 days, the NCD discount is cancelled for one year. After that year, the driver starts building NCD again from zero. If the gap exceeds 180 days, the NCD is permanently lost. To avoid this, always renew on time, or at least within the first 30 days after expiry.
Q4: How can I check my current NCD level before buying a new policy?
A: Drivers can check their NCD status through the official Najm mobile app or website. The service requires the driver’s national ID (for Saudis) or Iqama number (for residents) and the vehicle plate information. The system shows the applicable discount percentage instantly.
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