Hot topic on the social media today is the announcement of the new automobile insurance premium rates, recently approved by Bank Negara Malaysia (BNM), which will come into effect at the end of next week on 16th February. The estimated increase ranging from RM2 to RM23 is the main reason for the uproar.
The new rates is part of the New Motor Cover Framework and covers both comprehensive and third party insurance coverage for private vehicles and motorcycles. BNM approved the adjustment back in 2011 and allowed premium increases each year between 2012 and 2015.
This is the third increase since then and will continue to gradually go up until the detariffing of motor insurance premiums in 2016, after which the premium rates will be differentiated in accordance to the risk profile of each vehicle and owners claims record.
According to BNM, the implication will be marginal. Attached here is the appendix which details the rate increase.
As stated, Third Party cover for motorcycles of 110 cc will see a premium increase of between RM1 to RM3.50 per year, while for a private car of 1,400 cc, the premium adjustment sees between RM6 to RM34 per year. For commercial vehicles, the impact on passengers will be minimal at less than 10 sen per passenger per trip.