What is Motor Insurance and Motor Takaful Liberalisation in Malaysia?
Effective 1 July 2017, premium pricing for Motor Comprehensive; and Motor Third Party Fire and Theft products will be liberalised where premium pricing will be determined by individual insurers and takaful operators.
For more information about liberalisation, you can refer to the FAQs below:
What is Motor Insurance Liberalisation or De-Tariff?
As a customer, you might be able to access a wider choice of motor insurance products as liberalisation encourages innovation and competition among insurers and takaful operators. Insurers and takaful operators are able to charge premiums that are derived from their understanding of your risk factors and profiles
How is Motor Insurance Liberalisation or De-Tariff likely to affect me as a customer?
Effective 1 July 2017, under the liberalised environment, more risk factors will be taken into account in determining premiums. Other than the sum insured, engine size, age of vehicle and age of driver, premiums may be determined by other factors. These factors could be safety and security features of the vehicle, duration that the vehicle is on the road, geographical location of the vehicle and many more factors. These factors will define the risk profile of the policyholder which will determine the premium. As different insurers and takaful operators have different ways of defining the risk profile, the price of a motor policy may differ from one insurer to another.
Will I be paying more?
Some customers might pay a little more, but there will also be customers that pay less or around the same price. This will depend on your risk profile.
Will this change the way I purchase my insurance?
There will be no change to how you purchase your insurance policy currently.
If I am purchasing a new policy after 1st July 2017, can I elect to pay the tariff premium?
You will no longer be able to pay a tariff premium for Comprehensive and Third Party Fire and Theft new policies after 1st July 2017.
Will there be any change to my existing policy coverage?
There will be no changes to the policy coverage that you are currently enjoying.
What is risk based pricing?
Risk based pricing is a more accurate method of pricing which takes into account all risk factors of both the vehicle and the customer. Each insurance company is expected to be guided by its own identified risk factors.
Does this mean I have to be interviewed prior to purchasing/renewing insurance?
No, but you need to provide the information requested by the insurance company to calculate the right premium for you. This information should be provided accurately regardless of whether you are providing the information online, through an agent, or directly to our branches or our call center.
When we are in the liberalised environment, will I need to get my car inspected prior to purchasing or renewing insurance?
Sometimes this may be necessary, but we will let you know if it is specifically required.
How would I know if a fair assessment has been done to determine my premium and I am not overcharged?
Premiums will now be charged based on the risk profile of the customer and the vehicle. As different insurance companies may assess the risk profile using different factors, there could be a difference in premiums amongst insurance companies. We will be pricing as accurately as possible, based on extensive knowledge of risk profiles and will ensure we always remain regulated within Bank Negara Malaysia guidelines.
Will Third Party Coverage price remain the same?
Yes, only Comprehensive and Third Party Fire and Theft can have liberalised price.
Will the No Claim Discount (NCD) still be maintained after Liberalisation?
The NCD structure will remain unchanged. You will be entitled to the NCD for which you are eligible, based on your claims record.
Can different insurance companies charge a different premium for the same vehicle?
Yes as we move from a tariff to de-tariff pricing environment, it is quite possible that insurance companies will vary in price. Premiums will now be charged based on the risk profile of the vehicle and customer.