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Easy 1,2,3: Education Series (Part II)

PolicyStreet / 07/07/2017

PolicyStreet presents to you our first education series – Insurance, as Easy as 1 2 3, where we shed light about anything insurance related in a candid and entertaining way.

If you have a burning question, reach out to us at admin@policystreet.com, leave us a reply below or even chat with us via www.policystreet.com. If your question tickles our funny bones, even better – we will feature them here to help others too.

In case you are not aware, or have been living under the rock of late, Malaysian motor insurance liberalization Phase 2 happened last weekend, on the 1 st July 2017. So what is all this mumbo jumbo about?! What are they all saying?

Well The Star has tackled some educational aspects of it, but let PolicyStreet entertain you some of our musings here now!

Question 2. What is motor insurance liberalisation and how does it affect me?

Phase 2 liberalisation of motor insurance depicts that premium rates for Motor Comprehensive, Motor Third Party Fire and Theft products will no longer be determined based on Motor Tariff (a set fixed price list). Pricing will be determined by individual insurers and takaful operators.

Insurers and takaful operators are able to charge premiums that are in line with broader risk factors inherent in a group of people being insured.

These are 10 ways of how this liberalisation may affect you as an individual!

1. The type of car you drive affects the way that you drive and your premiums.

2. If your car is one of the highly demanded models to be stolen by illegal syndicates, chances are you’d may be imposed additional premium too. High performance vehicles cars will incur even higher premiums.

3. If insurers use marital status to determine your premiums, this is good news if you’re married! Statistically speaking, married people have less accidents and therefore get the married discount due to lower risk.

4. Statistically speaking, young male drivers may be charged more premiums as compared to young female drivers due to their riskier profile, but there is a turning point where older female drivers become riskier than older male drivers, and thus be charged higher premiums compared to their male counterparts. Go figure!

5. This is for the millennials – although drivers under 25 have a higher risk and require higher premiums, not all insurers will drop rates just because you turn 25 🙁

6. In a tariff environment, flood cover has never been a part of standard Motor comprehensive coverage. Post liberalization, some companies may create new motor products inclusive flood cover but some may remain as is, so do read all the fine prints carefully! If you are paranoid about your car getting flash-flooded (hmm is that even a word…), look out for motor products with the added flood benefit!

7. Do not fret about your No Claims Discount (NCD) 🙂 The NCD structure will remain unchanged and continue to be transferable from one insurer or takaful operator to another.

8. It is said that black cars have a 12 percent higher risk of being involved in a crash during daylight hours than a white vehicle. PolicyStreet cannot predict when Malaysian insurers are going to use your car colour to determine your premiums though…

9. Your occupation could determine how much you need to pay for your insurance. Certain careers are statistically associated with higher accident risk, while others are associated with lower risk.

10. Liberalisation or not, this is a good reminder. It is important to put in the names of your car’s regular users as “Named Drivers” in your insurance. If an unnamed driver gets into an accident, insurers has the right to pay out less on the claim.

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