Motor insurance liberalisation benefits consumers - Hamzah

Minister of Domestic Trade, Cooperatives and Consumerism (MDTCC) Datuk Seri Hamzah Zainuddin said under the previous system, vehicle insurance was based on motor tariff.

"The new method also allows the insurance company to impose premium charge on vehicles with risk of being involved in accident," he told reporters at an Aidilfitri gathering organised by the Intellectual Property Corporation of Malaysia here today.

Hamzah also said with the motor insurance liberalisation, the government no longer controlled the insurance premium charge.

"This method is set by Bank Negara Malaysia (BNM) with insurance companies, and the announcement should be well-received by consumers as it benefits them," he said.

According to a statement by BNM last June 30, the first phase of the liberalisation was introduced on July 1, 2016 and effective July 1 this year, the insurance premium charge would be determined by risk factor.

The insurance premium is calculated based on the sum insured and model of the vehicle, as well as previous claim for damages.

Insurance companies also have the opportunity to offer better premiums, especially to low-risk customers, while consumers will have better options in getting the insurance that meets their needs at better prices.