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Yes to higher insurance premiums

Monday, 09 January 2012 09:59am

©The Sun Daily (Used by permission)
by TAN YI LIANG

PETALING JAYA: Consumer associations have welcomed the planned increase in motor insurance premium rates, citing better protection for consumers.

Federation of Consumers Associations (Fomca) CEO Datuk Paul Selvaraj told theSun yesterday the revised rates from Jan 16 would offer a sustainable structure to enable the industry to provide the coverage consumers want.

He was responding to Bank Negara’s announcement on Friday of premium adjustments planned over the next four years as part of the new motor cover framework to address structural issues within the motor insurance sector.

Under the gradual rate increase, 110cc capacity motorcycle premiums for third party motor insurance will be raised annually by between RM1 and RM3.50 over the next four years.

Premiums for private cars of up to 1,400cc will be increased by between RM6 and RM34 a year over the same period.

The impact of the premium adjustments on commercial vehicle passengers such as those using outstation taxis and buses will be minimal at less than 10 sen per passenger per trip.

Selvaraj said consumers must be made aware of the benefits of the increase, and that the benefits themselves must be transparent as the fee restructure would help address issues faced by insurance companies and consumers.

“One of the major issues has been third party coverage; insurance companies in the past often felt that third party coverage was not a viable offering for consumers. This is one of the issues taken into consideration in the fee structure,” he said.

Muslim Consumers Association of Malaysia executive secretary Datuk Nadzim Johan Johar pointed out that any increase in premiums must be justified.

“Consumers must know the logic. Even though the increase is not much, there must be a need for it,” he said when contacted.

Demanding that statistics be released to support the increase, Nadzim said the fact that there had been no increases in the past 30 years was no justification for raising rates. “Gone are the days when consumers would stomach any proposed increase put before them.”

Federal Territory and Selangor Taxi Owners and Drivers Association secretary-general Hiew Pow Man said the premium imposed on taxis should not be too high as taxis provided a public service.

He said taxi drivers were given special concessions by the government, such as a RM15 road tax fee, reduced toll rates and a 20% discount on original spare parts.

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