KUALA LUMPUR: Come July 1, owners of vehicle makes often targeted by car-theft syndicates will have to pay more in motor insurance premiums.
This follows Bank Negara Malaysia’s decision to liberalise motor insurance tariffs to allow for higher premiums when taking into account risk factors.
General motor insurance consultant Leong Chian Hann said insurance and takaful operators would increase the premium to reflect the risk factors of the vehicles being insured.
Vehicles which are often targeted by car-theft syndicates are considered high-risk, meaning the premiums will be higher.
“Starting from July 1, some cars will cost more to insure than others as the insurance companies have to bear higher risks. Some insurance companies might opt to not cover certain types of high-risk vehicles. This is up to the insurance and takaful operators’ discretion,” said Leong.
He said evaluation and assessment of the background of car owners would be done by insurance agents as well.
“The better the record, the lower the premium.
“Drivers who have had accidents every year will likely have to pay more than those with a clean driving record. Some insurance companies may not even cover drivers with frequent traffic violations and road accidents,” he said.
Leong said the purpose of the liberalisation of motor insurance premiums was to increase motorists’ awareness on the importance of safe driving.
“After the implementation, consumers are advised to ‘shop around’ to make informed purchasing decisions, by obtaining different quotations by contacting the agents, insurers or takaful operators,” he said.
iMoney group chief executive officer and co-founder Lee Ching Wei said the new measures would allow those with better ability to assess risk to offer more competitive products and pricing.
In turn, he said, this would benefit consumers.
“There will be more accurately priced motor insurance premiums based on an individual’s risk profile. The move will promote competitiveness and innovation among insurance companies.”
Automotive industry analyst Christine Lim said with the new measures, the motor insurance industry was more likely to experience better growth prospects.
Other than the sum insured, vehicle engine cubic capacity and age, insurers can take into account the vehicle’s safety and security features, duration on the road, geographical location and the motorists’ traffic offences record to determine premiums.