Traffic rule violators in Malaysia will have to pay higher motor insurance premiums, beginning July 01, according to the General Insurance Association of Malaysia (PIAM).
PIAM corporate communications manager Kuan Shook Quan said that the move is part of the government’s push for liberalisation of motor insurance tariffs, which includes more flexible pricing for policies.
Starting from July, premiums will be based on the risk profile of the drivers, aside from the current factors such as model, age, and displacement of the insured vehicle. Some of the risk factors are: driving habits, claims history, usage, and vehicle safety features.
Kuan said that this risk-based insurance model will mean lower premiums for safe and law-abiding drivers, while penalising those who disregard traffic rules. Premium prices will vary among insurers, due to their subjective methods of interpreting risk. This opens up competition in the motor insurance sector.
“There is no fixed system of calculation, but several standard risk factors will be considered by insurance companies,” Kuan told the
Sun Daily. “Driving behaviour, driving experience and claims records are expected to be factors for consideration in risk profiling to determine the premium.”
“The recently launched demerit points system Kejara is also expected to be another risk factor in risk profiling,” she added. “With this transition, consumers are now empowered to improve their risk profile and enjoy lower premiums.”
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