Warning of Compulsory Insurance Collapse in Jordan 2026 – Croquat Fraud Crisis

Warning of Compulsory Insurance Collapse in Jordan! Croquat Fraud Threatens Sustainability – 2026

Hazem Al-Madadha, legal committee chair of the Jordan Insurance Companies Federation, revealed alarming signs that compulsory vehicle insurance in Jordan may be under threat, warning that the sector is experiencing significant financial bleeding that could affect service availability unless urgent legislative intervention takes place.

Why Are Insurance Companies Reducing Coverage?

The number of companies offering compulsory insurance dropped from 22 to only 9 due to ongoing losses.

What is “Croquat Purchasing”?

This refers to fraud where staged or falsified accident reports are used to claim unjust compensation, inflating claims costs and straining insurer finances.

Impact on the Insurance Market

- Higher volume of illegitimate claims

- Manipulated medical reports

- Staged accidents to trigger payouts

These practices have led to accumulated losses and some firms considering withdrawing from compulsory coverage.

Legislative Moves to Tackle the Issue

Ongoing efforts include:

- Criminalizing croquat purchases explicitly

- Rebalancing protections for drivers and insurer sustainability

- Clarifying contract rights and obligations

These aim to close loopholes exploited for fraud.

FAQs – COMMON QUESTIONS

Q1: What is compulsory insurance in Jordan?

It’s legally required coverage for vehicle liability before driving on public roads.

Q2: Why are insurers withdrawing?

Because of financial strain from fraudulent claims, croquat purchasing, and high compensation costs.

Q3: What is croquat fraud?

Fraudulent acquisition of accident rights or staged claims to collect undeserved compensation.

Q4: What’s the solution?

Introducing clear legislation to criminalize croquat purchasing and reform insurance regulations for sustainability.

Sources and references

Insurance premium hike targets traffic violators — Jordan Times.

New insurance law to apply to all contracts, target fraudulent claims — Jordan Times.

Central Bank establishes new guidelines for compulsory insurance — Rōya News / Jordan News.