26 Apr - 4 min read
In the past few decades, buying or renewing a motor insurance policy has been a pretty much straightforward process. Your premium is determined by the type of model, the age of the car, the engine capacity of your vehicle, and no claim discount up to 55% if you don’t make a claim.
However, in July 2017, the motor insurance market will be de-tariffied in Malaysia which will change the way you purchase motor insurance. Let’s find out more.
Let’s use Teh Ais – a favourite drink among Malaysians – as an example;
If the cost of a glass of Teh Ais were regulated by the government and is set at between RM2.20 to RM2.50 per glass that would mean it’s a tariffed product. If the government later decides to de-tariff Teh Ais, the restaurants and eateries are then free to charge a glass of Teh Ais according to their incurred costs and discretion.
Insurance providers can adjust premium rates based on your risk factors as a driver, which is known as a “Risk-Based Premium Calculation”. The higher your risk is, the higher your premium will be. Some of these factors include:
These are just a few of the risk factors that insurers will take into consideration when determining your premium rate. Countries like Germany, China, USA, UK, and Singapore have beat us to it by years. So don’t worry, it’s hardly a new concept!
So, here are some things we think will benefit you as a customer:
Here are some of the things that you can do to prepare for the changes:
If you aren’t sure on what to compare when buying a motor insurance policy, here are some of the things that you need to take note of and consider:
a) The quality of their customer service.
b) The ease of making a claim.
c) The speed of their claims process.
d) Whether the level and type of coverage is sufficient for your needs.
These tips will help you to shortlist the insurers that you can consider purchasing from after the de-tariffication. You should also compare the products from reputable insurance providers that are recognised by Malaysians, such as RHB Insurance Motor Insurance.
What are your thoughts on the de-tariffication? Do you think it will benefit you as a consumer? What other ways can you do to lower your premium after it takes effect? Share your opinions and tips in the comment section below!
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