The liberalisation of motor comprehensive insurance, which kicked off on July 1, will see motorists now having to pay for their vehicle insurance premiums no longer on a fixed rate basis, but on a risk-based assessment system.
Still, vehicle owners should not be unduly worried about detariffication as the new method is set to benefit consumers more, according to domestic trade, co-operatives and consumerism (KPDNKK) minister Datuk Seri Hamzah Zainuddin.
Consumers will have more options in getting the insurance that meets their needs at better prices, and good drivers or those with who have no records of accident claims stand to benefit. “The new method allows the insurance company to impose premium charge on vehicles with risk of being involved in accident,” he was quoted in a Bernama report.
Hamzah also said with liberalisation, the government no longer controlled the rates of motor insurance premiums. “The system is set by Bank Negara Malaysia (BNM) with insurance companies, and the announcement should be well-received by consumers as it benefits them,” he said.
In the new model, the insurance premium charge will be calculated based on the sum insured and model of the vehicle, but will also take into account risk factors, including previous claim for damages.
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AI-generated Summary ✨
The comments express skepticism about the claimed benefits of motor insurance liberalization for consumers, fearing it will lead to increased premiums and higher costs amid concerns about industry fraud and collusion. Many feel past government promises, like lower prices after GST, have not materialized, and worry about insurance companies prioritizing profits through unfair practices and risk classification. Some highlight the industry's failure to tackle fraud, which inflates costs, while others call for transparency and independent reviews before implementation. Overall, the sentiments are largely negative, with doubts about whether the liberalization will genuinely benefit consumers or just enrich insurers at the public's expense.