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.