Business

Saturday November 7, 2009

Motor policies will incorporate reference point


PETALING JAYA: Most major motor insurance and takaful companies have agreed to incorporate a reference point to determine the market value of vehicles into their motor insurance policies.

Last month, the General Insurance Association of Malaysia (PIAM) and Bank Negara endorsed ISM Insurance Services Malaysia’s automotive business intelligence system (ISM-ABI). The ISM-ABI is the only approved system for vehicle valuations among financial services companies in Malaysia.

“The introduction of the new system for motor insurance is in line with practices in other developed markets,” said ISM chief executive officer Carl Rajendram.

He said that most major motor insurance and takaful companies were in the process of adopting a new and more transparent system for motor insurance.

“It is part of the modernisation of Malaysia’s motor insurance and takaful cover announced recently and will ultimately benefit consumers, and insurance and takaful companies,” he said.

The entire automotive industry was moving towards greater competitiveness and efficiency and the ISM-ABI would play a pivotal role in driving this objective among all stakeholders, he said.

“With the new service from ISM, insurance and takaful companies now have the ability to generate renewal notices with the current year sum insured with the corresponding premium to be paid.

“The service increases transparency in the whole motor insurance process not only for purchasing insurance but also during claims,” Rajendram said.

He said presently, many insurance companies printed the previous year’s sum insured and corresponding premium on the renewal notice sent to its vehicle owners and the onus was on the vehicle owner to adjust the sum insured to the current market value.

With the new system, insurers and takaful operators may also choose to pre-determine the compensation upon theft and total loss claims by referencing the database.

“Consumers are also able to verify the vehicle market value themselves from the website and access the same information that insurers are accessing,” Rajendram said.

The new service would reduce uncertainty when insuring a vehicle and reduce dissatisfaction that consumers experienced when making an insurance claim.

  • E-mail this story
  • Print this story