Motorists will need to pay more for their insurance premium from next year under a new framework announced by Bank Negara Malaysia this week (Source: The Star, 26 February 2011).
The increase would be "manageable" as it would be spread over four years with BNM refuting a report in a local daily which stated premium would rise by between 250% and 450%.
Example, citing fugures for certain category, motorcycles with 100cc and below, the annual increase would be between RM1.00 to RM3.50 for Third Party and RM1.00 and RM2.00 for Comprehensive. For Cars 1500cc and below, the annual increase would be RM6.00 to RM 34.00 for Third party and RM7.00 and RM19.00 for Comprehensive. Overall premium paid would depend on factors such as age of vehicle and motorist's history of claims.
The adjustment is necessary as the premium for motor insurance has not been reviewed since 1978 and Insurance Companies have constantly raised the issue of third party motor insurance being unprofitable given low premium which do not commensurate with the high claim costs.
According to BNM, the motor insurance business incurred an estimated annual loss of RM 650 million as at 2009/2010.
Under this new framework and until 2016, when the premium for motor insurance is expected to be liberalised and determined mostly by market forces, motorists can expect faster claims period from an avearge one to five years to six to eighteen months. Is this possible?
No comments:
Post a Comment