Friday, March 2, 2012

Higher auto insurance this year after BNM de-tariffing

Car owners will be paying more for their auto insurance this year. The first revision to the motor tariff premium rates took effect on Jan 16. It is the first increase in more than 30 years.

According to Bank Negara Malaysia (BNM) in a Jan 6 press statement entitled “New Motor Cover Framework”, the adjustments will be minimal and implemented gradually over a period of four years.

“For example, in respect of third-party cover, motorcycles of 110cc will experience a premium increase of between RM1 and RM3.50 a year (a maximum of 30 sen per month) over the next four years. For a privately owned car of 1,400cc, the premium adjustment will be between RM6 and RM34 per year (a maximum of RM2.80 per month) over the same period.

For commercial vehicles such as outstation taxis and buses, the impact of the premium adjustment on passengers will be minimal at less than 10 sen per passenger per trip,” says BNM.

To calculate your auto insurance premium, refer to the calculator under"Useful Tools” in .

The central bank will continue to review motor tariff premium rates periodically. This is to ensure that the adjusted premium rate is more reflective of the risk underwritten by insurers.

“The New Motor Cover Framework paves the way for the de-tariffing of motor insurance premiums in 2016. The de-tariffing will further differentiate the premium rates based on the risk profile of individual vehicles.

It is also fairer to vehicle owners, as those with fewer experiences that warrant an insurance claim will enjoy better premium rates compared with those with a higher risk profile,” says BNM.

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