Bank Negara made an announcement of the increase of vehicle insurance rate. The increase minimal which is between RM1-3.5 for 110cc motorcycles and RM6-RM34 per year for 1400cc car for example. Read further news and car insurance details from bernama and the insurance info site.
MOTORCYCLES, CAR INSURANCE PREMIUM RATES INCREASE
The gradual revision in the motor tariff premium rates will be implemented effective Jan 16, 2012, says Bank Negara Malaysia (BNM).
In a statement today, BNM said the revision would be the first to be undertaken after the non-revision for over 30 years.
The central bank said the premium adjustment was in small quantum and to be implemented over a period of four years.
For third-party cover, motorcycles of 110cc will experience a premium increase of between RM1-RM3.50 per year only (a maximum of 30 sen a month) over the next four years.
For a private car of 1,400cc, the premium adjustment will be between RM6-RM34 per year (a maximum of RM2.80 a month) over the same period.
For commercial vehicles such as outstation taxis and buses, the impact of the premium adjustment on the passengers will be minimal, at less than 10 sen per passenger per trip.
BNM gave assurance that the implication on the public and businesses will be marginal.
According to BNM, the adjustment in the motor tariff premium rates will be reviewed periodically to ensure that the adjusted premium rates continue to be reflective of the claims experience.
The revision of tariff is part of the New Motor Cover Framework in addressing the structural issues within the motor insurance and takaful sector.
The framework will pave the way for the detariffing of motor insurance premiums in 2016 in which premium rates will be further differentiated in accordance to the risk profile of individual vehicles and fairer to vehicle owners as those with good claims experience would enjoy much better premium rates than those with higher risk profile, it said.
BNM had previously said that the tariffs which have not been revised for more than 30 years had been a major source of difficulties faced by the public in recent years.
While the premiums had not been adjusted, there had been significant increases in the level of car ownership to about 19 million to date, accident rate and claims, it said.
BNM had said the framework would also involve immediate implementation of critical measures to enhance efficiency in claims settlement.
The enhancements will significantly reduce the average claims settlement period to six to 18 months from the present one to five years.
To ensure that the public is aware and able to benefit from the framework, particularly on the enhancements to the motor claims settlement process, BNM and the insurance industry will continue to provide information to the public on motor insurance issues through consumer awareness and outreach programmes currently in place.
BNM said those with queries relating to the framework may contact the central bank at TELELINK : 1-300-88-5465 or visit www.insuranceinfo.com.my.
Enquiries can also be forwarded to either Persatuan Insurans Am Malaysia (PIAM) or individual insurers, it said.
INFO FROM THE INSURANCE WEB
As part of the New Motor Cover Framework (the Framework) in addressing the structural issues within the motor insurance sector, Bank Negara Malaysia is pleased to inform on the progress of enhancement measures to improve the claims settlement process and the implementation of gradual premium adjustments since its announcement on 11 March 2011.
In ensuring that the public has access to motor insurance at reasonable premiums, several immediate measures were introduced in May 2011. Among the measures undertaken include ensuring that the public would be able to obtain motor cover from the Malaysian Motor Insurance Pool from any general insurer or their branches as well as from any Pos Malaysia branch nationwide.
To ensure the successful implementation of the identified improvement measures under the Framework, a Joint Working Committee (JWC) was established in April 2011, comprising representatives from key Government ministries, the insurance and takaful industry, consumer and transport groups as well as the Malaysian Bar Council. Several enhancement measures already implemented have resulted in enhanced efficiency of the claims settlement process, with faster turnaround time for claims on personal injury, especially for cases that were settled via court mediation. Further measures to enhance efficiency include the referrals to the Compendium of Personal Injury Awards by judges in awarding compensation for personal injury as well as the enforcement of timelines for obtaining police and medical reports. Other measures for the implementation of further efficiency enhancements include the introduction of a motor insurance claims kit to expedite notification of an accident and claims as well as the establishment of a nationwide 24-hour call centre to provide immediate roadside assistance to accident victims in the first quarter of 2012.
As part of the Framework, the gradual revision in the Motor Tariff premium rates will be implemented effective from 16 January 2012. It will be the first to be undertaken after non-revision for more than 30 years. Over the duration, the levels of car ownership, accident rate and claims in Malaysia have risen significantly. In addition, hospitalization costs, medical expenses and costs of vehicle repairs and spare parts have also increased.
The premium adjustment is in small quantum and to be implemented gradually over a period of four years. The implication on the members of the public and businesses will be marginal. For example, in respect of Third Party cover, motorcycles of 110 cc will experience a premium increase of between RM1.00 – RM3.50 per year only (a maximum of 30 sen per month) over the next four years. For a private car of 1,400 cc, the premium adjustment will be between RM6.00 – RM34.00 per year (a maximum of RM2.80 per month) over the same period. For commercial vehicles such as outstation taxis and buses, the impact of the premium adjustment on the passengers would be minimal at less than 10 sen per passenger per trip.
The adjustment in the Motor Tariff premium rates will be reviewed periodically to ensure that the adjusted premium rates continue to be reflective of the claims experience. The Framework will pave the way for detariffing of the motor insurance premiums in 2016, in which? premium rates will be further differentiated in accordance to the risk profile of individual vehicles and fairer to vehicle owners as those with good claims experience would enjoy much better premium rates than those with higher risk profile. To ensure that members of the public are aware and able to benefit from the Framework, particularly on the enhancements to the motor claims settlement process, Bank Negara Malaysia and the insurance industry will continue to provide information to the public on motor insurance issues through the consumer awareness and outreach programs that are currently in place.
There are many important considerations when it comes to buying a vehicle. Insurance is one of them. Read these important points to note when it comes to buying motor insurance:
Insured value/sum insured
You need to protect your interest by purchasing a motor insurance to ensure that your vehicle is adequately insured so that you will receive the claim amount in the event of loss or damage. For a new vehicle, the insured value is the purchase price. For other vehicles, the insured value is the market value of the vehicle when you apply for insurance policy.
It is important to insure your vehicle for its exact amount to prevent the following circumstances:
Under-insurance – If you insure your vehicle at a lower sum than its market value, you are considered as self-insured for the difference, i.e. in the event of loss / damage, you will only be partially compensated (up to the proportion of insurance) by your insurance company.
Over-insurance – Should you insure your vehicle at a higher sum than its market value, the maximum compensation you will receive is the market value of the vehicle as the policy owner cannot ‘profit’ from a motor vehicle claim. Therefore, you would have paid higher premiums for nothing.
Duty of disclosure
Disclose all material facts fully, including previous accidents (if any), modifications to engines, etc. When in doubt as to whether a fact is relevant or not, ask your insurance company.
By failing to reveal any material facts, your insurance company may refuse to pay your claim or any claim made by a third party against you. In such cases, you are personally liable for such claims.
The price of motor insurance depends on the type of policy you select. The insurance premium charged by your insurance company is the standard minimum rate in accordance with the Motor Tariff.You can compute the standard premium charged from the premium calculator here.
In addition to the standard minimum rate, your insurance company may impose additional premiums known as loadings to the premium payable in view of higher risk factors involved such as age of vehicle and claims experience. Loadings are governed by Bank Negara Malaysia (BNM) and no insurance company may charge loadings higher than the levels permitted by BNM.
Reward schemes such as no-claim-discount (NCD) can also let you save money by ferent NCD rates applicable for different creducing your premiums. There are diflasses of vehicles. For a private car, the scale of NCD ranges from 25% to 55% as provided in the policy.