Prior to the announcement by the Government recently to set up a new company for especially 3rd party vehicles owners to be named Third Party Injuries TPIBD Newco, owners of vehicles 10 years or older was facing much difficulty in securing coverage for their vehicles.
Amongst other things, owners had to succumb to insurance companies who compelled those wishing to secure 3rd party insurance to:
i) Secure at least a RM8000 1st party coverage. With a 50% N.C.B. discount, the premiums alone came to approximately RM248 annually.
ii) Failing to agree to the above proposal, owners had to agree to purchase a RM10,000 Personal Accident (P.A.) policy.
The biggest hassle of all was that insurance agents had first of all to receive green light from the insurance headquarters in Kuala Lumpur before any 3rd or 1st party insurance coverage could be approved.
If readers and vehicle owners feel the setting up of a new company to cater for our woes and difficulties will automatically end our predicament, you are sadly mistaken.
The Consumer Association of Penang (C.A.P.), for instance, is deadly set against the setting up of TPIBD Newco, a new company to be incorporated jointly by the government and insurance companies very soon.
C.A.P.’s president, S.M. Mohd Idris wants the government to set up No Fault Liability (N.F.L.) insurance following the steps of Victoria State, Australia.
C.A.P. believes, under the above N.F.L. scheme, prompt compensation could be paid out to accident victims. There is also the question of lower administration costs involved. All in all, such a scheme will eventually make it affordable to the public.
C.A.P. is also of the opinion that the current system of 3rd party insurance and also 1st party should be maintained. We however have to revamp premiums, which unfortunately have remained unchanged since 1975.
Insurance agents, like my close buddy, Mr. Ah Peng, will obviously not be too happy with the setting up of the new company to be set up by the government soon. Why? His company’s business will be at stake.
So this group of people wants the current system of purchase of 3rd party and new 1st party insurance to remain. It looks as if this group of people are not bothered at all if consumers face difficulties or not, as long as their insurance selling business is guaranteed.
Not all big insurance companies in Malaysia are too happy with the government’s latest proposal too. To them, the whole insurance market today is in an uncertain situation. Especially the motor insurance sector.
If they could, they will wish that the status quo remains. It will then be good for them and bad for the consumers though.
Can the government then solve the problem of compulsory purchasal of 3rd part and 1st insurance for vehicles prior to the issuance of road tax?
One should remember, under the Road Transport Act 1987, road tax cannot be issued prior to 3rd party or 1st party insurance being obtained.
The problem facing consumers today is not insurance premium alone.
More importantly, it involves claims. Repair claims made by vehicles for accidents and injuries is said to have cost the insurance companies huge losses. The government has to think very seriously how it’s going to settle this problem facing it today.
Whatever it is, C.A.P. president, Mohd Idris, has advised the government to ignore calls by certain groups to retain the existing system as they are largely motivated by their own interest.
Finally, should a new insurance company catering for 3rd party as well as 1st party insurance be set up, as announced by the Cabinet recently?
Pertaining this, the Cabinet and the government as a whole should think about it carefully and come up with a good solution! It cannot allow this problem to be prolonged any further. The public has suffered enough!