insurance

Earlier in the week, we reported that motor tariff premium rates in the country were set to be revised effective February 15, continuing on the four-year adjustment period that was first announced in 2012.

The tariff revision is part of the New Motor Cover framework – 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; those with good claims experience will enjoy much better premium rates than those with a higher risk profile.

Below is a statement issued by the Persatuan Insurans Am Malaysia (PIAM) on the matter:

The General Insurance Association of Malaysia (PIAM) wishes to clarify that the gradual premium adjustment under the new motor cover framework was introduced in 2012.

The new motor cover framework has a two-prong strategy, i.e. to enhance efficiency in the provision of motor 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 take effect from January 1, 2012 over a period of four years. This year (effective February 15) represents the third round of adjustments on motor tariff premium rates. The adjustments will be small and implemented gradually in stages.

In respect of Third Party cover, motorcycles of 110 cc, for example, will experience a premium increase of between RM1 and 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 to RM34 per year (a maximum of RM2.80 per month) over the same period. For express buses, the impact of the premium adjustment on the passengers would be minimal at less than 10 sen per passenger per trip.

Unlike previous years, there is no premium adjustment for 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 bus, factory bus, stage bus and tourist bus as well as hire cars (hirer driving) in which premiums have not been adjusted at all. This is to reflect their relatively better overall claims experience.

The new motor cover framework is 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, insurers have adopted various measures and one of it is the introduction of the Accident Assist Call Centre (AACC) to provide emergency assistance to policyholders involved in road accidents. The 24-hour hotline at 1300-22-11-88 also offers accident towing services and attends to 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 for further assistance.