Traffic offenders to pay higher insurance premiums come July 1

PETALING JAYA: Traffic offenders, including those sanctioned under the newly implemented Kejara demerit points system, will have to pay higher insurance premiums come July 1.

General Insurance Association of Malaysia (PIAM) corporate communications manager Kuan Shook Quan said the change was in line with the announcement by Bank Negara Malaysia assistant governor Jessica Chew on April 21 that motor insurance tariff would be further liberalised by introducing flexible pricing for insurance products.

Kuan said effective July, premiums would be charged based on the risk profile of the insured, in addition to the present model, age and cubic capacity of the insured vehicle.

These (risk factors) included driving habits, claims history, usage and safety features of the vehicle.

Kuan said this new policy, which is similar to a risk-based insurance, would mean lower premiums for lower risk drivers with good records on the road.

“There is no fixed system of calculation, but several standard risk factors will be considered by insurance companies. 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 told theSun.

“With this transition, consumers are now empowered to improve their risk profile and enjoy lower premiums,” she said.

Kuan explained that consumers can expect varying insurance prices between different companies, as assessment of drivers’ risk profiles would be subjective.

“They should shop around and get the best insurance coverage that meets their needs and at a price best suited to them. However, consumers are cautioned that a lower price does not mean a better product. Proper assessment and due diligence must be done,” she said.

Kuan added that the changes (to liberalise insurance pricing) would apply to all motor comprehensive products and motor third party and theft products, with premium pricing to be determined by individual insurers and takaful operators.

“However, premium rates for motor third party products will continue to be subjected to tariff rates,” she said.