PETALING JAYA: Repeat traffic offenders will from July 1 have to pay higher motor insurance premiums under a new regulation to encourage safe driving habits. The change, said General Insurance Association of Malaysia (PIAM) corporate communications manager Kuan Shook Quan was in line with an earlier announcement by Bank Negara Malaysia (BNM). BNM last year announced that from July 1, this year, how much one pays for insurance will no longer be determined by fixed price lists, but by his or her risk profile. This means that theoretically, no two insurers will have identical pricing for a motor comprehensive policy. Kuan said premiums would soon be charged based on the risk profile of the insured, in addition to the present model, age and cubic capacity of the insured vehicle. She said 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, experience and claims records are expected to be factors for consideration in risk profiling to determine the premium," she told theSun. She said for low risk groups, premiums are expected to be lower, on the other hand, for high risk groups, premiums are expected to be higher. However, this can be moderated by risk reduction factors undertaken by the policyholders e.g. safer driving habits to reduce accidents, installation of car telematics or certified anti-theft devices for cars which help reduce theft. She said under the liberalised environment, more risk factors will be taken into account in determining premiums, adding that other than the sum insured, cubic capacity of the vehicle's engine, age of vehicle and age of driver, premiums may be driven by other factors. She said these factors could be safety and security features in the vehicle, duration the vehicle is on the road, geographical location of the vehicle (in areas with higher incidents of theft) and traffic offences on record. She said these factors will define the risk profile group of the policyholder which will determine the premium. She pointed out that different insurers have different ways of defining the risk profile group, the price of a motor policy would differ from one insurer to another. "With this transition, consumers are now empowered to improve their risk profile and enjoy lower premiums," she said. "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.