3rd Party Insurance Rate For Old Vehicles

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3rd Party Insurance Rate For Old Vehicles

Only July 7th 2009, the Star newspaper announced a new tariff for 3rd party insurance is being drawn following insurance companies refusal to offer coverage to vehicles that are more than 10 years old.

When the government announced its intention to do away with its decision to scrap its policy of making it compulsory for 15 years old vehicles to be inspected by the Puspakom authorities, many owners accepted it gleefully.

They thought that their woes and troubles were over at long last. How wrong they were.

Permit me to quote Deputy Finance Minister Datuk Chor Chee Heung, who was reported to have said, “Bank Negara was reviewing the rate to come up with a premium that was acceptable to all”.

It is now 5th April 2010. Does it take the authorities such a long time to arrive at a decision such as the above?

True, insurance firms are not willing to offer 3rd party insurance. The rate has remained the same for more than 30 years. Whatever it is, it baffles one that a review of the above rates should take 9 months!

Since then, owners of old vehicles which are 10 years or older, have been subjected to ransom by the insurance companies.

Just recently, myself, upon wanting to renew my wife’s Proton Iswara which is more than 10 years old, found it extremely difficult to obtain 3rd party coverage for it.

The insurance agent, from whom I have been obtaining my insurance for many years, surprisingly informed me permission had first to be obtained from the insurance’s head office in Kuala Lumpur, before they are permitted to cover any vehicle.

An in all, this year’s 3rd party coverage increased by RM40. After a 55% Non Claim Bonus (N.C.B.) deduction, the amount came to a staggering RM240. I still owe my insurance agent this amount up to today.

Upon going to renew my road tax at the general post office, my inquiry from the lady clerks provided me the answer that they do provide 3rd party insurance also. And their rates, calculations and conditions are as stipulated below:

i) Coverage only for vehicle less than 15 years.

ii) Only for vehicles which has an N.C.B. discount of 55%.

iii) Minimum coverage of RM8,000.

The total cost, the lady clerk at the post office told me came to approximately RM200.

Should you weigh carefully the rates offered by my insurance agent and the post office, there exists a discrepancy of RM40!

Besides the differences in 3rd party motor insurance payment, Mr. Chor, the Deputy Finance Minister said the government is aware of many complaints lodged by motorists who are unhappy that insurance companies forced them to buy additional personal accident packages if they want to buy 3rd party schemes.

And even before the new proposal for 3rd party insurance can be announced, the second Finance Minister Datuk Ahmad Husni Hanadzlah announced that Bank Negara was studying the formation of a special company to oversee the new scheme.

Besides that, the proposals that Bank Negara is currently taking into considerations which limits 3rd party insurance claims to a sum of RM100,000, irregardless of the condition of the road accident victims who are involved in accidents.

Presently payout amount by insurance companies depend on court cases which takes into consideration liability, how badly a victim is injured, the victim’s current and future earnings and the cost of looking after an accident victim.

By limiting the amount to a sum of RM100,000 tantamount to a “sell out of public interest” to insurance companies.

It should also be remembered that those who suffer serious injuries are mostly motorcyclists. They are mostly from the lower income group and are mostly youths and students.

It is therefore pertinent for Bank Negara when considering these new proposals, Bank Negara should first of all seek the public’s opinion before making such an important decision.

By | 2012-09-22T00:05:41+00:00 April 5th, 2010|Auto Insurance|4 Comments

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4 Comments

  1. appykhoo February 8, 2012 at 12:26 am - Reply

    Dear Cikgu Yap,

    i have a question. i bang a car last week because it was rainy and i just received my p on the exact same day. i requested not to go to the police station there was alot of drama. the guy kind of like harassed me and ask me to pay rm1800 within one hour or he will report me to the police and will press a third party claim against.

    im just 19 and im clueless at that point of time. i paid him cash, and now i start to realise that im being cheated and i want to press charges against him for blackmailing.

    • Cikgu Yap February 8, 2012 at 8:13 pm - Reply

      Many people are unaware, driving is not just a question of having a license, one should also know how to deal with accidents too. You have already paid such a large sum of money to the person whose car you knocked into. You infact should have contacted your family to assist you.

      To press charges now, in my opinion, is a little bit too late. Take this incident as a good lesson. See to it such a bad decision is never made again.

  2. ham April 2, 2012 at 6:00 pm - Reply

    can i ask you a question ? i bought my 2nd hand kancil last 2 years and the car insurance is expired on this march 2012. when i ask the agent to renew the car insurance, he said that actual amount is around 2++ plus ringgit but bcos my car is an old car ( 1995 ) , so i must buy another accident insurance i guess . so total for the amount it rm380. but last year i also paid for this amount and i thought insurance is getting cheaper cheaper n cheaper depend on the insurance right ? so izzit every insurance company is compulsory the customer to add more 1++ ringgit plus to buy the insurance ? bcos my agent said if i don’t want to buy the accident insurance they don’t want to sell the insurance to me.

    • Cikgu Yap April 5, 2012 at 3:52 pm - Reply

      Present day, purchasal of insurance is expensive. RM380 appears to be the norm.

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