The General Insurance Association of Malaysia (PIAM) has provided clarification on the new motor insurance premiums (soon to be introduced) which the public has become aware of recently as the tariff chart has been circulated on the internet.
The association explained that gradual premium adjustment is undertaken under the new motor cover framework which was introduced in 2012, so it is not a new development. Back in January 2012, Bank Negara had announced that there will be a gradual revision in the insurance premium rates, the first to be undertaken after no revision for more than 30 years.
This move is to enhance efficiency in the provision of insurance cover by the industry with a gradual price adjustment that will ensure that public is able to purchase motor insurance at affordable premiums.
Under the framework, premium adjustments began from January 1, 2012 over a period of 4 years. The 4-year period is to allow the adjustments to be small and implemented gradually in stages. This year, with effect from February 15, will see the third round of adjustments on the rates.
In respect of Third Party cover (the minimum required by law), the insurance premium for motorcycles of 110 cc, for example, will increase by between RM1.00 – RM3.50 per year over the next 4 years.
For a privately-registered car with a 1400 cc engine, the premium adjustment will be between RM6.00 – RM34.00 per year over the same period.
For express buses, the impact of the premium adjustment on the passengers is expected to be minimal at less than 10 sen per passenger per trip.
Unlike previous years, there is no premium adjustment for the commercial goods carrying vehicles, taxis and hire cars (chauffeur-driven) during this round of adjustment.
Meanwhile, there are other classes of vehicles, such as school buses, factory buses, stage buses and tourist buses as well as hire cars (from car rental companies) which will not have any premium adjustment. PIAM says this is because of their relatively better overall claims experience, presumably meaning the owners do not make many or expensive claims for compensation.
PIAM sees the new motor insurance framework as ‘a positive step towards promoting a liberalised insurance sector with further measures taken to improve the motor insurance and claims settlement processes’.
To enhance the claims settlement processes, various measures have been adopted by insurers, one of them being the introduction of the Accident Assist Call Centre to provide emergency assistance to policyholders involved in road accidents. This 24-hour hotline 1300-22-11-88 also offers assistance to contact authorized tow-truck operators (for those involved in an accident) and answer claims enquiries.
The association advises policy owners who wish to obtain clarification on how the new motor insurance framework will impact them to direct enquiries to their respective insurance company.
