Motor insurance premiums might increase soon

According to StarBiz, the price of motor insurance might go up soon, spearheaded by two insurance firms – MAA Assurance and AmAssurance. Although the government regulates prices of motor insurance, insurance companies can charge higher premiums through loading charges.

Loading charges have not been increased significantly before, except for AmAssurance’s increase of third party coverage loading charges half a year ago and MAA Assurance’s extra charges for third party coverage as well as commercial vehicles.

Following the move of these two companies, it’s expected that other insurance companies will follow suit. The rationale for this price increase is the high number of claims recently, with a ratio that exceeded 71% last year. Even March 2007 figures have reached 75%.

Source

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Paul Tan

After dabbling for years in the IT industry, Paul Tan initially began this site as a general blog covering various topics of personal interest. With an increasing number of readers paying rapt attention to the motoring stories, one thing led to another and the rest, as they say, is history.

 

Comments

  • longjaafar (Member) on Jun 28, 2007 at 6:56 pm

    The insurance industry is equally guilty of not keeping up with the times. It's time taht they do some work and charge according to the degree of risk involved. Insurance is all about risks, right? True, the govt will need to be convinced, but I have a strong feeling that so far, the insurance industry has not 'educated' the govt enough. The problem with the govt is that they will wait for proposals from the industry before they do their own study. They are not pro active and would take a long time to decide. Of course there will be hoards of officers going all over the world on the ubiquitous 'study tours'. Let them.It's a small price to pay if the outcome is a better deal for the both the industry and the motorists.

    Another thing that is very perplexing is when the insurers pay 'total loss', the ownership of the vehicle changes to the insurance company. By right, the registration of the vehicle should be immediately cancelled once total loss has been paid.

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  • Carfan (Member) on Jun 28, 2007 at 7:23 pm

    I do agree with Loogjaafar. Our country’s insurance calculation method has been outdated. Today, all of us are paying the same sum irrespective that you’re a good driver or not. One will pay the same amount of insurance premium with the others despite having wrecked the cars over and over again and even wrote off (Exclude NCB in this argument). Question is, is it fair to charge the same premium for drivers that are free from accident which most of the cases has NCB up to max 55% with those who claim their insurance annually? Our Insurance industry players need to look in their calculation method where risk is to be accessed according to Driver’s behavior. The fewer claims, the lower the premium. I do agree that we have NCB. What if you’ve been a good driver for 5 years and one unlucky day, you meet with an accident? The NCB will be written off. By taking into consideration of Driver’s behaviour, the premium will reflects in line with the drving behavior. Perhaps our industry players can look into the system which is implementing by the US Insurers. Cheers!

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  • digiman (Member) on Jun 28, 2007 at 7:26 pm

    oh no.. australia.. here i come

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  • xg9 (Member) on Jun 28, 2007 at 7:31 pm

    WTF!!!!!!!!!

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  • e-nabilll (Member) on Jun 28, 2007 at 8:08 pm

    insurance companies are like banks..thy r a loss free market…even if everybody claims their insurance thy wil stil make money ! i hope the government intervenes somehow n stop them charging as much as thy want …and their excuses are basless…..and regarding wat carfan said above…thy stil using that method bcos it nets them more income ….

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  • ossd (Member) on Jun 28, 2007 at 9:49 pm

    e nabill… spot on!

    The business model is perfect…. collecting upfront premiums and only paying out when the insured gets into an accident. No person in their right mind would want to get into any accident, hell… if i could guarantee that i won't get into an accident, why i would i buy insurance… hehe make sense?.. their exact business feeds on man's fear of the unknown.

    Likewise, in a market, or rather a contry that does not promote competition and condone transparency… there is absolutely no incentive for the insurance companies to bring their rates in line with driver's personal driving behaviours or risk assessments. They are protected in an oglilopoly.(if i don't mispell that.) One company increase price, all will follow suite… confirm one.

    Who's gonna complain? the rakyat. Fark them lah. or rather fark us! we are too dumb to even open our mouths even when these thieves reach for our wallets in our own pockets!!!

    Oh by the way… the are good points of such blanket coverage rates too… i drive a red wira, in my 20s, got my license for less than 5 years. in the US, i would be paying extra "loadings…"

    hehe… point is, what for? charge people rates based on their risks… charge a blanket rate for all parties concerned, sure cover one.

    haha… in your face! You stoopid consumers cows….

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  • coolguru (Member) on Jun 29, 2007 at 2:17 am

    Not fair!!! Whay good drivers like you and I needed to be penalize for lousy/kopi license drivers out there??

    Paul, how can these messages goes out to everyone?

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  • 4G63T DSM (Member) on Jun 29, 2007 at 4:32 pm

    Lets be real careful on what you ask.

    Like it or not rates will go up, irrespective of you being a good driver or not.

    Good drivers will pay more, bad drivers just have to pay very much more. Be very thankful on the premiums you pay now. It rediculously low compared to other countries.

    Insurance companies are companies afterall, they will still need to make money. As much as possible if they could.

    I was paying close to CAD$260/MONTH! on THIRD PARTY on my modified Eclipse dispite the fact I had a clean record (not even a speeding ticket) and had been driving for 10 years. Fresh drivers with the same car would be paying CAD$500/mth. Those that have been abroad will feel the sting of insurance (most of it is due to personal liabilities). This is steep, even taking the currency at par. CAD to RM is 1:3. Insurance per year could be more expensive than the car you are driving. Are people safer drivers, maybe. As what ppl mentioned, Insurance is insurance, it feeds on people's fear. But then again, so is life, accidents happen. One single accident have the potential of trippling your rates and ruining you financially. Want that tradeoff?

    I'm paying RM100/yr 3rd party for my Satria dispite the additional loading and still feel thankful….. c'mon….thats 8 bux a month. You guys are still complaining??

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  • 4G63T DSM (Member) on Jun 29, 2007 at 4:41 pm

    Those that have kids close to driving age and those that just got into the workforce will feel the pinch.

    To offset "good" drivers, the most hard hit will be first time drivers. Fresh drivers are "inexperiecned" and therefore more risky to insure. Just watch those rates skyrocket.. A younger fellow out of school in his first job away from home, having to saddle rent, car payments and high insurance premiums…..is a real killer. If its not already bad enough for car payments already.

    I've been through that once. I can still feel the sting bad.

    Maybe some of you dont have kids yet, but dont expect your rates to stay low when your kids start driving your car.

    What I am saying is to look at the big picture. It can be a lot more worst than you imagine.

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  • transformer (Member) on Jun 30, 2007 at 1:10 am

    seems like many thing has started to raise price after G rise servant pays…

    but for non-servant, we kena… coz our gaji tak naik !

    DAMN Banyak Naik !

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  • mystvearn (Member) on Jul 01, 2007 at 4:36 pm

    I agree with Longjaffar, but there is something you need to know. Bank Negara Malaysia are the ones making the insurance policy, so up to know there is still no individual based risk insurance. Its better that way as consumer is on the winning end but I guess BNM wants to keep the companies happy

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  • BanyakMasukWorkshop (Member) on Jul 02, 2007 at 8:55 pm

    you guys should check out the insurance premiums singaporeans are paying.

    anyways.. i just dont think our market is mature enough for a system like those used in the US or UK currently. even the police are not able to make the 'kejora' points system work..

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