With the newly introduced motor detariffication (where premium is no longer solely determined by vehicle sum insured and engine capacity but also by the risk profile of the individual driver), it now has become even more important for Malaysians to compare car insurance prices. For this reason, we at iBanding decided to carry out a car insurance comparison by 6 companies in Malaysia via their online insurance portals.

iBanding recently was lucky enough to have a member in its team whose motor insurance policy was nearing its expiry date. We quickly took this opportunity to see how far motor detariffication in Malaysia has changed the renewing process as well as the premium charged by different companies. We also wanted to find out which company is providing the cheapest car insurance.

 

Click to view the Ultimate Guide to Buy Car Insurance Online

Car Insurance Comparison

*6 car insurance companies compared*
We decided to check the premium offered by these 6 car insurance companies via their online insurance portals:

1. Syarikat Takaful Malaysia
2. Takaful Ikhlas
3. Berjaya Sompo
4. AXA Affin
5. Etiqa Insurance
6. AmGeneral / Kurnia

 

The case study

For the purpose of this study, we will be using the following information to find out how much will a comprehensive policy will cost us.

• IC number : ~
• Model : MYVI SE ZHS
• Make and Year : 2014
• Gender: Male
• Marital status : Single
• Hire Purchase Company : ~
• Vehicle number: ~
• NCD: 30%
• Type of policy: Comprehensive cover
  

With all this information in hand, we proceeded to check the car’s current market price on MyCarInfo which came up to RM29,000.

 

Required information:

We noticed that several information that was not required before the implementation of motor detariffication is now being asked on the companies’ websites. The table below shows the information required by each company.

Legend
X – Info required

Insurance Co.	Etiqa	Sykt Takaful	Berjaya Sompo	AXA Affin	Takaful Ikhlas	AmGeneral / Kurnia
Occupation	X		X	X	X	X
Garage		X	X	X	X	X
Safety Features		X	X	X	X	X
Anti-Theft		X	X	X	X	X
Import type		X	X	X	X
Driving Experience	X			X	X
Number of Fault Claim	X			X	X
Major Traffic Conviction	X		X	X
Previous Insurer	X		X		X
Variant	X					X
Type of Driving License	X			X
Purpose of insurance				X
Registration card number		X				X
Engine Number		X	X
Chassis		X			X
Number of info required	7	7	8	10	9	6

 

Descriptions:
Safety features: Includes any feature/ technology assisting in the prevention of car crash. Example: Airbags, anti-lock brakes (ABS), traction control, electronic stability control, safety-belt feature, accident avoidance systems, tire-pressure monitors, telematics.

Anti-Theft: Any device used to prevent or detect unauthorized access to the car. Example: Gearshift locks, ignition/ steering wheel column and crook locks, gear shifter locks and brake pedal locks.

 

The Verdict: Premium comparison

The following table shows premium we received from the 6 companies:

Insurance Co.	Etiqa	Sykt Takaful	Berjaya Sompo	AXA Affin	Takaful Ikhlas	AmGeneral / Kurnia
Sum Insured	Not obtainable	RM 29,000	RM 29,000	RM 29,000	RM 29,000	RM 32,000
Premium	Not obtainable	RM 1001.8	RM 1,101.98	RM 1,001.80	RM 1,001.80	RM 1187.78

 

The outcome, although expected, was still a little surprising to all of us. Despite knowing that immediate, drastic changes were unlikely, we did not expect to see that there were no difference in prices among the companies. The only oddball being AmGeneral / Kurnia that was due to the higher sum insured, which we were unable to adjust.

To read about the experience we had in getting these prices from all the six companies, please go to the end of this article. 

 

Conclusions

The second phase of motor detariffication allows insurance companies to set their own prices for products offered. It is perhaps too early to assess the impact of detariffication as insurance companies are taking a cautious approach in adjusting their prices while keeping a close eye on the competitors. 

It is a crucial time for the insurance companies. Careful planning in pricing strategy is required to ensure their profitability and market share are not significantly impacted by this change.

The impact of motor detariffication is minimal, but customers will eventually feel the change and will compare car insurance plans more often. Insurance companies are already introducing new and innovative products to put themselves ahead of the competition. Such as the AXA FlexiDrive launched in July that saw the first telematics insurance being introduced in the country.

Consumers need to prepare for the shift that is taking place in the motor insurance industry. An unconcerned and apathetic attitude towards it may result not only in higher premium but also unnecessary purchase of add-ons bundled in the policy. Consumers should know the impact their risk profiles have on their insurance premium, as well as a clear understanding of the product that they need.

To read more about motor detariffication and how it will affect you, please click here.

 

Comparing User Experience

 

Below you will find our experience for the 6 different insurance companies. Note that renewal is done via each company’s online portal.

1. Etiqa

Etiqa first asked for basic information as you can see from the picture below. As soon as we clicked “get a quote”, we were required to provide more detailed information. One notable experience with Etiqa is that they do not ask for the availability of a garage, safety features and anti-theft systems. However, there  were several questions required by Etiqa that were requested by only one other company, such as car variant, type of driving license and registration card number.

The premium by Etiqa could not be obtained as we received the following error message: “NCD confirmation is unavailable as confirmation already been taken earlier. Make sure no duplicate confirmation request, if not the confirmation already taken by another insurance / Takaful company”. With this error, we could not continue any further with the renewal process. Due to this error, we had to minus 1 star from our 5 star user experience rating.

First screen when buying insurance

Total information required: 7
Overall user experience: 

(4 out of 5 stars)

 

2. Syarikat Takaful Malaysia

Requesting for a quotation from Syarikat Takaful Malaysia was a breeze as they have their own fast and easy to use online system. Users can get the quotation right off the bat, as shown in screenshot below.

Takaful Malaysia does not request for occupation, driving experience, traffic conviction, and all the information associated with the new risk profile after the implementation of detariffication.

Screen when buying motor insurance from Syarikat Takaful

 

Total information required: 7
Overall user experience:

(5 out of 5 stars)

 

3. Berjaya Sompo

Renewing motor policy through Berjaya Sompo’s online platform was a tiring process. We had to key in all the information required manually. Berjaya requires you to answer 8 questions in total.

 

First screen when buying motor insurance from Berjaya Sompo

 

Total information required: 8
Overall user experience:

(3 out of 5 stars)

4. AXA Affin

Axa Affin’s process to buy insurance looked very simple. With a few information, you can already get a quotation. But here is the catch, the price shown is not really the price you might be paying for. When you decide to actually buy, you are asked for more information and are shown the final price. Compared to other insurance companies Axa Affin asked for the most number of information from buyers. The process is quite long and tedious. Especially if you do not have the information at hand.

 

First screen when you buy motor insurance from Axa Affin

 

Total information required: 10
Overall user experience:

(2 out of 5 stars)

 

5. Takaful Ikhlas

The process to renew our policy with Takaful Ikhlas is more or less the same as the process we went through with Berjaya Sompo. This is due to the fact that they are actually using the same online platform.

Takaful Ikhlas asks for chassis number, unlike four other companies. Generally, the process is cumbersome and tiring.

Here an overview of the steps needed to buy insurance from Takaful Ikhlas

Total information required: 9
Overall user experience:

(3 out of 5 stars)

 

6. AmGeneral/Kurnia

The renewing process with AmGeneral/Kurnia was a simple one. AmGeneral/Kurnia asked for the least number of information. Only 6 information was required because most information is retrieved automatically based on the vehicle number. However, we did encounter an error message saying  “Could not complete the request. Please retry, reason undefined”.

This error caused us to redo everything.

We checked that no information provided was erroneous and tried again and it worked. -1 star for the error, because we had to repeat the process again.

Another downside is that we were not able to adjust the sum insured. For that missing functionality -1 star.

First screen when you buy motor insurance from AmGeneral / Kurnia

 

Total information required: 6
Overall user experience: 

(3 out of 5 stars)

 

What are your experiences? Have you tried to compare car insurance prices before and did you find our car insurance comparison guide to be useful?

The post Compare Car Insurance Prices in Malaysia After Detariffication appeared first on iBanding Making better decisions.

The Malaysian Transport Ministry is studying the possibility of implementing a flexible road tax payment system that will be calculated based on vehicle conditions, mileage and drivers’ traffic offences, according to a report by The Malay Mail.

“This flexible road tax payment system is an incentive from the government to prudent drivers to reduce their road tax rates. With the advancement of technology, we can now know their mileage, so the lower the mileage the lower the road tax rates,” said Transport Minister, Datuk Seri Liow Tiong Lai.

This effort is in line with the recently implemented phased liberalisation of motor insurance, also known as detariffication that aims to, among others, promote fair premium rates based on the risk profile of policyholders.

However, Datuk Seri Liow did not offer any more detail on the system or when Malaysians can expect it to be implemented.

To know more about second phased of motor detariffication that was launched on July 1st, go here.

The post Lower road tax charges for prudent drivers? Government to study soon appeared first on iBanding Making better decisions.

Phased Liberalisation of Motor and Fire Tariffs – Know these 7 things:

1. What it means – Phased liberalisation of motor and fire tariffs is also known as de-tariffication of motor and fire insurance. It means that the regulating body (in this case, Bank Negara Malaysia) will no longer tariff the pricing of motor and fire insurance. Insurance and Takaful companies in Malaysia will be able to determine their own methods in deciding each motor and fire insurance policy they sell.

2. Implementation dates – Phased liberalisation is carried out in two phases. Phased 1 took place on 1 July 2016 where insurance companies were allowed to introduce tariff-free insurance products to the market. Phase 2, which will be implemented on 1 July 2017, is when we will be expecting to feel the direct impact where prices of motor insurance will no longer be the same. However, Third Party cover will not be experiencing any immediate changes.

3. Why – The change is deemed necessary as cost especially for Third Party policy has become too high for the insurance and Takaful companies where the actual pay-out for claims is between RM 1.30 – RM 3.00 for every RM1.00 premium received. De-tariffication is also introduce fairer pricing where safe drivers will pay lower premium than riskier drivers will. This is not something unique to Malaysia, in fact many countries all over the world have been practising it for many years.

4. Pricing – Motor insurance premium under phased liberalisation will take into consideration the risk profile of the policyholder. Unlike the current practice where sum insured and vehicle engine size (cubic capacity) being the only factors determining the price of motor insurance. Because the price was tariffed (controlled), the premium we pay for our motor insurance has been the same (or almost the same) no matter which company we buy our policy from.

5. Premium calculation based on risk profile – Risk profile of policyholder means how likely the policyholder will be making a claim against his insurance and how big the claim amount will be. Factors that will determine one’s risk profile includes: Gender, driving experience, claims history, location of residence, occupation, vehicle type and model, use of vehicle, vehicle mileage and history of traffic offences. Under phased liberalisation, insurance companies will look at each policyholder’s risk profile to decide on the premium. Higher risk equal higher premium. Lower risk means lower premium.

6. What to expect – Aside from the obvious change in premium, expect fierce competition among the insurers. Insurers will compete in several ways to win over customers including introduction of a variety of innovative products, improve in service and professionalism and most importantly – price!

7. The role of the consumer – Consumers are mainly concern about price they pay for their premium, the service provided by the insurance companies, the policy coverage and its benefits. With the price difference that insurers will start to impose and the variety of new products they will be introducing, it is best for consumers to shop around before buying a policy. Consumers should compare products and prices offered by several companies to find the most suitable one. Call up several insurance agents to help you find what you need and do so ahead of your policy expiry date.

Here’s a video you you might find interesting.

Want to know more in depth about phased liberalisation of motor and fire tariffs? Go HERE and you will find lots more interesting information including videos.

Find out who are Malaysia’s favorite motor insurance companies as voted by consumers 2016.

The post Phased Liberalisation of Motor and Fire Tariffs – 7 Things Malaysians Need to Know appeared first on iBanding Making better decisions.

What is the Competition Act 2010?

The Competition Act was implemented on 01/01/2012. It is set to protect the Malaysian consumer from large companies that fix prices to keep the profit high.

For example, if all the bread makers decide to fix the price for bread at RM2.99, then the bread makers are not allowing competition. This is called anti-competition. This is bad for the consumer because in a free market, some bread makers may decide to sell the bread for RM 2.00, because the cost to produce the bread is only RM 1.00.

Who are the main parties?

1) Malaysian Competition Commission (MyCC) – an independent body formed in June 2011 to enforce and implement the Competition Act.

2) Bank Negara Malaysia (BNM) – the Central Bank of Malaysia.

3) Persatuan Insurans Am Malaysia (PIAM) – also known as the General Insurance Association of Malaysia (GIAM). An association which represents and promotes the interests of general insurers in Malaysia.

4) Federation of Automobile Workshop Owners’ Association of Malaysia (FAWOAM) – an association which represents and promotes the interests of workshops in Malaysia.

5) General insurance companies in Malaysia – the insurance companies who provide motor insurance cover under conventional insurance.

What actually happened?

In 2011, BNM directed PIAM and FAWOAM to come to an agreement involving motor parts discounts and labour hourly rate, as everyone was pricing it their way which resulted disputes among general insurance companies and workshops.

The terms agreed between PIAM and FAWOAM were:

• Fixed trade discount in agreed percentages for parts on Proton, Perodua, Nissan, Toyota, Honda, Naza
• Fixed rate for labour for general insurance companies’ or PIAM approved workshops at RM30/ hour.

Some workshops disagreed at being forced to provide trade discounts on parts and fixed hourly rates as this will affect their capability to provide the level of services required and will impact their profit.

The Malaysian Competition Commission viewed the agreement as a violation to the Competition Act as it indirectly forms a cartel and suppressed workshops through standardized trade discounts on spare parts and labor hourly rates. This in turn may reduce the quality of repairs to motor vehicles.

What does this mean to Malaysian drivers?

There is no change for the Malaysian drivers, because the insurance companies are paying the workshops for the repair. The fixed prices help the insurance companies make more profit from the workshops. This decision by MyCC is a big win for the workshops, because without fixed prices, they can decide their own prices.

What will happen next?

The Malaysian Competition Commission’s (MyCC) proposed fine is not final. General insurance companies are now coordinating with PIAM and BNM to seek a judicial review to defend themselves against MyCC’s claim. The fine will be a big impact to the insurance companies, especially the smaller insurance companies.

If MyCC wins, they will turn its attention to Malaysian Takaful Association (MTA) members offering motor policies.

Source:

http://www.thesundaily.my/news/2175999

http://www.bnm.gov.my/index.php?ch=en_press&pg=en_press&ac=4384&lang=en

http://www.thestar.com.my/business/business-news/2017/03/01/bank-negara-slams-myccs-decision-to-fine-piam-and-its-members/#O3WPKKgE5PLmyhPS.41

The post General Insurance Companies are Possibly Fined RM 213 Million by MyCC appeared first on iBanding Making better decisions.

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</p> <p><strong>Source https://www.ibanding.my</strong></p> <p><a href='https://ibanding.com.my/detariffication-of-motor-insurance-in-malaysia-infographic/'><img src='https://ibanding.com.my/wp-content/uploads/2017/01/All-you-need-to-know-about-Detariffication.jpg' alt='Detariffication In Malaysia' width='500px' border='0' /></a></p> <p>
 

Current system

All this time, motor insurance premium in Malaysia follows a tariff structure and has been controlled by the government, Bank Negara Malaysia to be specific. The method of calculation is based on the 2 main factors, which are:

1. Market value of the vehicle
2. Vehicle engine capacity in CC

Additionally, there could be other factors that may affect the premium cost, these are:

1. Packaging – this includes additional insurance products that the insurance company ‘package’ together with the primary motor policy, such as Personal Accident;
2. Loading – this includes all additional costs imposed by the insurance company on certain conditions perceived to carry higher risks, such as vehicle older than 10 years old.

Because the method of calculation is the same across all insurance companies and is according to the vehicle you drive, the premium you pay is similar no matter which insurance company you buy from, with a small difference sometimes. This difference is mainly due to:

1. Sum insured – different companies may value vehicle differently
2. Packaging – different companies may have different additional products and/ or services packaged in their main motor policy
3. Loading – different companies may have different loading conditions

How De-tarification will change things in July 2017

De-tariffication = removing tariff. Bank Negara will no longer control motor insurance premium or the method of its calculation under de-tariffication. This means that insurance companies will be free to use their own methods to calculate premium. Under de-tariffication, insurance companies will implement risk-based pricing method. This means that in determining premium price, insurance companies will be considering several risk factors. They will no longer rely only on your vehicle (I.e. market value and engine capacity) to calculate premium, but also the driver himself. This isn’t a new concept, in fact, it is a normal practice in countries such as the USA, Germany, UK, China and Singapore.

To the consumer, several things can be expected from this change:

1. Cheaper insurance – because prices will no longer be similar across insurers, consumer will start to look around for company that can offer cheapest premium. To be competitive, it is expected that insurance companies will start to lower their premium prices.
2. New products – it is expected that insurance companies will start to introduce more insurance products to the consumer to be competitive.
3. Increased professionalism – in another effort to compete, insurance companies will improve their services offered to the consumer

New premium calculation method – risk-based pricing

To simplify it, premium will now be based on your perceived risk. This means:

The higher risk you carry = the higher your premium price will be.

The lower risk you as the insured is perceived to carry = the lower your premium price will be.

The risk factors include:

1. Age of the driver: Younger driver means less driving experience. Therefore they carry a higher risk.
2. Gender. Female driver have lower risk as they drive more carefully.
3. Occupation/ education. Generally the assumption is that the higher education, better occupation the driver has, the lower are his risks.
4. Claims history. If the driver has had claims before, this could mean that his risk is higher.
5. Type and make of vehicle. High performance cars, expensive and luxurious cars will have higher premium as their risks are also higher.
6. Usage of car. A car used by a mother to send and pick her children from school daily will have lower premium than a car used to commute daily to work in the city.

So what can we do to ensure lower premium?

Here are some good practices to keep your motor insurance premium low:

1. Shop around for the best deal – compare prices among insurance companies to find one that offers the best price along with the best products and service. Shopping for best deal doesn’t necessarily mean cheapest deal!
2. Secure your car – remember, lower risk, lower premium. So do what you can to secure your car. Make sure that the alarms and auto-locks are working. Install a dash-cam if you can afford one. Always park your car at safe location. This will reduce the risk of your car being stolen or damaged during an attempted theft.
3. Think before purchasing a car – before buying a car, check how much will the insurance premium be for the type of car you are considering buying.
4. Drive safely! Lower your risk of getting into an accident. When you have no claim history, your premium will be lower.

Read and understand more about de-tariffication and how it will impact you and don’t stop there. Let everyone you know about it. Be a smart consumer, understand how you can prepare yourself for de-tariffication.

Suggested reading:

https://ibanding.com.my/de-tariffication-are-you-prepared/

https://ibanding.com.my/motor-detariffication-and-how-this-affects-the-price-of-your-motor-insurance/

https://ibanding.com.my/timeline-for-malaysias-motor-detariffication-announced-july-2017

http://www.bnm.gov.my/files/publication/fsps/en/2015/cp02_001_box.pdf

The post All You Need To Know About De-Tariffication of Motor Insurance in Malaysia – Infographic appeared first on iBanding Making better decisions.

We have covered a lot about road accident in our Accident 101 series, from what to do at the scene of the accident and at the police station, to how to handle different kinds of insurance claims. Below are the articles in case you have missed them.

1 – What to do at the scene of an accident

2 – What to do at the police station

3 – Don’t fall victim to tow-truck scam

4 – Making a car insurance claim

5 – Making a Third Party Insurance Claim 

This is our last article in the 101 series where we will be summarizing some of what had been discussed in earlier titles and talk about other frequently asked questions relating to road accidents especially in Malaysia. So let’s begin!
 

Road Accidents: FAQ

1. I just crashed into a car, damaging it and my own. Can I claim from my insurance?

It depends on the policy that you have, assuming that it is your fault, if you own a:

• Third party policy: No. You have to pay for your own damages. The other party however can claim from your insurance.
• Comprehensive cover: Yes, your insurance can pay for damages for both cars, but you will lose your NCD if you make a claim to repair your car.

The table below will help you understand the types of policies and their coverage:

Motor policies and coverage in Malaysia

(Suggested reading: Understand Motor Insurance Policies and Coverage)

2. I just ran over somebody’s dog, injuring/ killing it. Can the owner claim damages from me? What if the owner is suing me for damages, can I claim from my insurance?

We will address this question in two parts:

a) I just ran over somebody’s dog, injuring/ killing it. Can the owner claim damages from me?

Yes, the dog is someone’s property, hence the dog owner can claim Third Party Property Damage (TPPD) from your motor insurance.  However,  he will have to provide documentary and undisputed proof that the dog belongs to him to your insurer.

b) What if the owner is suing me for damages, can I claim from my insurance?

Yes, your Motor insurance will protect you from claims like the above.  If your insurer is satisfied that the dog owner’s claim is valid, then your insurer will compensate the dog owner’s claim directly.  You do not need to pay the dog owner and then claim back from your insurer.

3. I crashed into a tree, suffering a few broken bones and had to be hospitalized. Can I claim from my motor insurance for treatment and hospitalization cost?

No, your motor insurance does not cover for your medical costs.  We recommend that you protect yourself by buying at least a Personal Accident (PA) cover. Some insurers bundle their PA with Motor insurance and it is called Drivers and Passengers Personal Accident (DPPA).

Allianz Enhanced Road Warrior

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4. A motorbike crashed into my car and the police concluded that it was his fault. But I’ve been told I can’t I claim from his insurance for damages done to my car because it involves a motorbike!

This seems to be a common belief, but it isn’t true. You can in fact make a TPPD claim against the motorbike’s insurer, more so when the police are on your side. The instances where you cannot claim against the motorbike’s insurer are:

(a) his motor policy has expired or

(b) he has no motor insurance policy from the onset

In both instances, you can make a TPPD claim directly against the motorbike rider or owner, or appoint a lawyer to do so.

However, bear in mind that lawyers cost money, and the damages to your car have to be substantial enough to justify hiring a lawyer.  You also have to consider if the motorbike’s rider or owner have the ability to pay you if they lose the case in court.  For example, if your car’s damage is worth RM1,000 and your lawyer cost RM3,000, it may not be worthwhile to sue if the motorbike’s owner is a clerk earning RM900 month with a large family to feed.

The part where you have been told that you cannot claim from the motorbike’s insurer for damages done to your car is probably the confusion over the Knock for Knock (KFK) Agreement.  The KFK Agreement is an agreement among all general insurers and general takaful operators to eliminate disputes among themselves as to who is at fault.  You do not need to know about KFK as it is an internal matter among insurers and does not prejudice you from making a TPPD claim.

5. A taxi/ bus rammed my car from behind. Will I be able to claim from their insurance?

You can file a Third Party claim (link to our TP claim article), though claim involving public vehicles may not be as straightforward and could be time consuming and tedious. We highly advise you to engage a loss adjuster. You will also have to pay for the repair first and claim after.

(Suggested reading: http://www.loyarburok.com/2012/12/11/accidental-lessons/)

6. A friend who was in the car with me obtained an injury when the car I was driving skidded and hit a lamppost. He is demanding that I pay for his medical cost. What can I do?

(Suggested reading: Motor insurance additional coverage)

If you had purchased an additional cover to your motor policy called “Legal Liability to Passenger (LLP)”, your insurer company will pay for your passenger’s medical treatment cost up to a certain limit. This cover is not expensive, about RM30-50 per year depending on your car engine’s cubic capacity.

However if you don’t have LLP, you will have to bear the cost yourself, unless your passenger is able to prove that he is being carried in your car by reason of and in pursuance of a contract of employment.  In simpler words, your friend needs to sit in your car as you are driving him to his workplace.

7. I was involved in a road accident with another car but I am sure it was not my fault. However, I was found guilty by the investigating officer. What can I do?

You have two choices:

(a) Appoint a lawyer and fight it out in court.  Nowadays, courts are quite efficient, however, you will still need to take time off from your daily activities to attend the court hearing.  Inform your insurer that you want to litigate this matter as your insurer will pay up to RM2,000 in legal fees if you get their consent in writing.  It does not matter if you have Comprehensive, Third Party Fire & Theft or Third Party Cover.  Usually your insurer will provide a lawyer from their panel of lawyers for ease of communication.

However, your insurer will not entertain you if this is a murder case or due to non-accident matters like speeding tickets, parking on the yellow lines, car got clamped, etc as these does not fall under the scope of motor insurance coverage.

Please bear in mind too that the court’s decision may vary greatly depending on the facts of the case.  Do not be surprised if the court sided with the opposite view. We covered about this here.

(b) Take no action, as going to court is a hassle and not worth the time or effort especially if the amount involved is small.   However, before you pay the traffic fine, please notify your insurer to seek their feedback especially if the police charge you under Section 41, 42 or 43 of the Road Transport Act 1987 as these are serious offenses and can carry a jail term. Please refer to question No 1 for conditions on claiming for your car’s repair costs and NCD entitlement.  For an understanding of NCD, click here.

8. I was involved in a minor road accident. I paid the other party off since the amount is small and paid for my own repair without claiming from my insurance company. Do I still need to inform my insurer?

By law, all accidents must be reported to the police within 24 hours, failing which you will be fined from RM120 onwards by the police for late reporting.  In addition, the motor policy stated that you have to notify your insurer accordingly, even if you have settled the matter amicably with the other motorist and you have no intention to claim.  The reason is that your insurer will have early warning of an accident involving your car in case the other motorist reneged and files a Third Party Property Damage (TPPD) or Third Party Bodily Injury claim (TPBI) against your insurer.

However, realistically it is a consideration you have to take, as some insurer will immediately remove your NCD, even though you are clearly not claiming. This is galling especially if your NCD is already at 55%.

9. My brother drove my car one day and met with an accident. Will I be able to claim insurance?

With a TP cover, you cannot claim insurance from your own insurer. But if you have a TPFT, you can only claim from your own insurer if your car is damaged by fire, explosion, lightning or is stolen.

If you have Comprehensive cover, you can claim insurance from your own insurer.  Take note that under Comprehensive cover, there is the “Compulsory Excess” or “Endorsement 2F”.  This excess states that for any cost of repairs claim, the first RM 400 will be borne by your driver or you (if you are the one driving) under the following conditions:

a) Under 21 years old
b) Holds an “L” license
c) Holds a “P” license
d) Not a named driver
e) Any combination of (a) to (d)

In order to prevent being charged RM 400, please ensure that the driver is at least 21 years old, holds a regular driving license and is a named driver.  A “Named Driver” is someone whom you have named in your motor policy.  You can name two drivers free of charge and the third person onwards will cost an extra RM 10 each.  Read more about it here.

Kindly note that this Compulsory Excess of RM 400 is not applicable if your car catches fire, explodes, struck by lightning, or is stolen.

10. What if my insurance company declines my claim and does not pay for damages?

You have two main options:

(a) File your grievance with the Ombudsman for Financial Services. They are located at:

Level 14, Main Block,
Menara Takaful Malaysia,
No 4, Jalan Sultan Sulaiman,
50000 Kuala Lumpur.
Tel: 03-2272 2811
Fax: 03-2272 1577
Online: http://www.ofs.org.my/en/feedback.html

The Ombudsman’s jurisdiction can be found at http://www.ofs.org.my/en/scope#jurisdiction. They will try to resolve your complaints within 3-6 months if the documents are complete. Their decision is binding on the insurer but not you if you accept the decision.  If you do not accept the Ombudsman’s decision, you may proceed with other means including litigating the matter or via Arbitration.

(b) File a complaint to Bank Negara Malaysia at:

Jabatan Komunikasi Korporat,
Bank Negara Malaysia,
P.O Box 10922,
50929 Kuala Lumpur.
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Upon receiving your complaint, BNM will compel the insurer to respond to your complaint. However, BNM cannot force your insurer to pay your claim.
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The post Accident 101 – Road Accidents Frequently Asked Questions appeared first on iBanding Making better decisions.

This is Part 5 of our Accident 101 Blog series. If you haven’t read the first four articles, you might want to check those out too.

1 – What to do at the scene of an accident

2 – Don’t fall victim to tow truck scam

3 – At the police station

4 – Making a car insurance claim

In our previous article, we covered the types of claims you can make against your own insurance company when you own a comprehensive cover. In this article, we will be talking about third party claim. It is often written short as TP or TP claim.

Who is this third party we are always talking about?

Third party simply means the other party that is involved in the accident. In Malaysia, every motorized vehicle is required to have at least a Third Party insurance policy. This policy covers you against third party claims for injuries or death caused to them during an accident. It also covers against losses or damages to the third party’s property caused by your vehicle.

Read more about the different types of policies here or watch the video below to understand the different types of policies and their coverage. 

When can a Third Party claim be made?

A Third Party claim is filed when you have been in an accident that was not your fault where the other party needs to pay for your damages. The other party will have at least TP insurance to pay for:

1. your bodily injury or death
2. your property (if his car ran into your house/ shop) and car.

If the other party is at fault, you do not lose your No-Claim Discount (NCD), as you will not be filing against your policy.

What are your rights as a Third Party policy owner?

Let’s understand your rights if you own a TP policy and what kind of protection you are entitled to. We will look at two scenarios:

Scenario 1 – Accident was your fault

Example: You have accidentally knocked into someone else’s vehicle, causing damages to the car.

In such a case, the third party has the right to make a third party claim against you. Depending on the type of policy they have, they will either claim it from your insurance company directly or have their insurer act on their behalf.

You will need to go through the normal process of filing a police report and informing your insurer about the accident. You do not need to be concerned with the claim that the other party will be making against your insurance company. Your insurance company will be taking care of the matter and reach out to you if they needed more information.

Because the accident was your fault, you will need to pay for your own damages since you only own a TP policy. This is the limitation of a third party policy. It offers the most basic coverage which is why it costs the lowest compared to other policy types.

Scenario 2 – Accident was NOT your fault

Example: While at an intersection, a car rammed into yours from behind due to brake failures. Causing severe damages to your car and injuries to you.

Same as above, you will first need to file for a police report within 24 hours of the incident. You then need to inform your insurance company of the accident. However, as a third party policyholder, you cannot claim against your insurance company. You need to file a claim against the other person’s insurance company. Furthermore, you are also unable to have your insurance company act on your behalf to make the necessary claims against the third party’s insurance company.

Unlike a comprehensive motor policy, you can file a claim with your own insurance company and they will help you handle the claim. They will even start the repair for you without you having to pay for anything.

When you only have a TP policy, you will need to pay for your repair first and then file the TP claim against the other party. This can take weeks or months before you get your money back. The process is long as all documents need to be submitted by both parties and their insurance companies need to agree on the repair value.

So this is where it gets a little complicated for you. When you only have Third Party policy, it is especially important to have a great insurance agent. He will help you with all the steps needed to file a claim against the other person’s insurance company.

Finding out the insurance company of a third party

In the past, it was very difficult to find out the insurance company of the other party. But this is no longer the case today.

MyCarInfo offers a free service that allows the public to find the insurer of any vehicle. It is called i-Search.

Procedure in making a third party claim:

1) After the accident make a police report within 24 hours

2) Very important! Send your car to the panel workshop of the other parties insurance company

3) Appoint your own Independent Licensed Adjuster to evaluate the cost of the damages to your vehicle. The adjuster will create a report for you

• An independent licensed Loss Adjuster will prepare a report for you about the vehicle damages. Also the adjuster will estimate the time you are not able to use your vehicle. This is called “Loss of Use” or CART (Compensation for the Actual Repair Time) and you will get some money for it to cover that loss (see below). The report will take about seven to fourteen days and you will need to pay the cost upfront. You can hire a Loss Adjuster directly or through the workshop. 

4) Send the documents to the Third Party Insurance Company

• While your car is being repaired, compile the following documents and send them via registered mail to the other party’s insurer. You will have to pay for the repair cost first, and seek reimbursement from the other party’s insurance company.

Documents needed:

• Original copy of the police report made by you
• The Keputusan report issued by the police department
• Copy of your NRIC
• Copy of your driver’s license
• Car registration card
• Adjuster report including bill of repair cost for your car (or your damaged property)
• Photo if any, of the damaged car (or property)

Optional 5) In very severe cases, where a lot of money is involved, it is advisable to hire a lawyer to act on your behalf in claiming from the TP insurance company.

Conclusion

These 4-5 steps describe the general procedure to file a third party claim in Malaysia. As of October 2016, Malaysia has over 31 insurance companies that sell motor insurance in Malaysia. Therefore it is best to call the TP insurance company to find out what documents are required, because some companies require more documents. A good insurance agent is especially important when you buy TP insurance. This is because you are on your own when an accident happens so having a reliable agent can help ease the trouble. The best insurance agents have plenty of experience and will guide you step by step to get your vehicles fixed and damages paid. If you are in search for an agent, check out our Insurance Agent Directory, where you can find the best agent near you. If you have questions or comments, please feel free to contact us under [email protected].

Loss of use or CART

You have the right to claim for Compensation for the Actual Repair Time (CART). Which means that the TP insurance company will compensate you for the loss of use of your car. It is estimated based on the number of days to have your car repaired. Below is the daily CART gauge outlined by Persatuan Insurans Am Malaysia (PIAM):

Important!! Loss of use is calculated based on the days where all documents are completely submitted and approval from insurer to repair is obtained. Not when the vehicle is stationary in workshop after accident.

The post Accident 101: Making a Third Party Insurance Claim appeared first on iBanding Making better decisions.

The Summary

After motor detariffication, insurance companies in Malaysia are allowed to set their own insurance prices. If you are considered a safe driver, your car insurance will be massively cheaper. If you are considered a dangerous driver, your car insurance will be more expensive.

The Details

In Malaysia, car and motorcycle insurances are regulated by Bank Negara. Motor insurance is Tariffed today. This means that Bank Negara has fixed how much motor insurance should cost for you. You can find the cost of your insurance on Insurance Info. It is free. Insurance companies follow a simple rule to calculate the price based on 4 key factors that are:

1. Value of your car, also called Sum Insured/Sum Covered
2. Extras & Loading, for example “Agreed Value”, age of car, etc.
3. Engine Capacity (cc)
4. Non Claims Discount (NCD)

>When you find out your price on Insurance Info, you might notice that the price shown is different from what you pay. This is because one or more of the 4 key factors are different. If your insurance price is lower, be happy and know that you pay a good price. If you pay more, you want to continue reading and find out if you can save money. You can save up to 15% today and up to 50%, when motor detariffication comes.

Why are prices different today, if Bank Negara has fixed it?

Although the price is regulated, in reality, when you go out and actually buy insurance, you notice that insurance companies charge a different price. Most of the time, the price of insurance is different, because of the key factor number 1. The value of your car, also called Sum Insured is different. The Sum Insured is very simple, the higher the value of your car, the more your insurance cost. If you own a car that costs RM 50,000 and you set the sum insured at RM 40,000, you pay a lower insurance price. You can save money and many people do that to keep the cost low, but be careful, when your car is damaged or stolen, you risk that the insurance company refuses to pay, because you have wrongly stated your car value.

Another common difference in price is because of factor 2: Extras & Loading. Extras are additional insurance covers that you buy like Agreed Value, Personal Accident or Roadside assistance service like Towing. Those Extra Services will increase the insurance price. Insurance companies like to sell those, because they make them good money. Loadings are small price increases that insurance companies are allowed to make. Each insurance company can decide on their own if to “Load” or not. Factors to load are things like Age of Vehicle and Insured Driver Age. In many cases, insurance companies will “Load” the price, if the car is older than 10 years. Also drivers younger than 25 years will see price increase of up to 15%. It is worthwhile to compare between companies.

Detariffication means prices will change based on drivers

When motor detariffication comes to effect, insurance companies will add new factors that will determine the cost of your insurance. Currently under considerations are factors like.

• Gender: Male drivers are more expensive than female drivers
• Martial Status: Singles drive more dangerously
• Occupation: Educated people drive more carefully
• Location: Based on your home. KL driver are more likely to have an accident

Now with the above factors insurance companies will have more freedom to calculate the price of insurance. It now depends less on the car and more on the driver that will drive the car.

Is Detariffication Good or Bad for me?

We from iBanding believe that the detariffication is VERY VERY GOOD. It means that “Good” and “Safe” drivers will pay cheaper insurance and “Dangerous” and “Un-safe” drivers will pay higher car insurance. This price change will make people drive more careful and make Malaysia’s roads over time safer !!! You don’t believe it? It happened in many other countries like Singapore and Malaysia is one of the last countries to detariff.

When will it happen?

It is not clear when and how exactly it will happen, but Bank Negara’s goal is to start the detariffication in mid-2016.

What can I do?

Each insurance company will have their own criteria on who is a “Good” and “Safe” driver. When it comes to renewal, some insurance companies will think that you are a “Dangerous” and Un-safe” driver and charge you a higher prices.  When Motor Detariffication comes to Malaysia, you start should start comparing prices between insurance companies to find out who the cheapest is for you. But cheapest does not always mean it is the best insurance for you. Take part in our free survey to find out which insurance company provides the best service.

More Resources

If you want to know more about detariffication in Malaysia, here are some useful online links:

• Tower Watson Article
• The Star article on 13.4.2015
• Investopia definition

The post Motor Detariffication in Malaysia appeared first on iBanding Making better decisions.