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.