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KUALA LUMPUR: The liberalisation of motor insurance would make Malaysians more accountable for their vehicles, said Malaysian Insurance Institute (MII).
Its chief executive officer, Datuk Syed Moheeb Syed Kamarulzaman, said the premiums for “good drivers and vehicle owners” would be lower with the liberalisation of motor insurance. “Efforts by the vehicle owners to install safety features in their cars would be an added advantage to help lower their insurance premiums.
“On the converse, it will also encourage the manufacturers to install safety features in the cars as the premiums would decrease,” he told Bernama.
Syed Moheeb said drivers without any traffic offences would also benefit. He said the liberalisation has opened the doors to consumers to be a better shopper for motor insurance.
“We have 28 motor insurance companies in the country. This move will increase consumer power to choose a better insurance package for their vehicle.
“Simultaneously, the competitiveness among insurance companies will also increase to serve their customer base better,” he said.
According to a statement by Bank Negara Malaysia (BNM) on June 30, the first phase of the liberalisation was introduced on July 1, 2016 and effective July 1 this year, the insurance premium charge would be determined by risk factor.
The insurance premium is calculated based on the sum insured and model of the vehicle, as well as previous claim for damages.
Insurance companies also have the opportunity to offer better premiums, especially to low-risk customers, while consumers will have better options in getting the insurance that meets their needs at better prices. Syed Moheed, however, said that despite the announcement of liberalisation by BNM, the policy would only take full effect by 2019.
“Nonetheless, the changes will not leave an impact on third-party insurance holders as most of them are from the lower income group and their vehicles are older. Thus, we do not want to burden them,” he said. - Bernama
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