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29 November, 2010

How to get insurance for old cars?


KUALA LUMPUR: The Government will speed up the process to come up with a mechanism to provide third party insurance coverage, especially for motor vehicles aged 10 years and above.

Deputy Finance Minister Datuk Donald Lim said the Government realised the difficulties faced by some vehicle owners in obtaining motor insurance.

"Bank Negara Malaysia (BNM) together with the ministry is forming a suitable mechanism to ensure the rakyat has access to motor insurance coverage at an affordable price.

"Discussions have been held with government agencies and the insurance industry from August to September to obtain their support in carrying out initiatives to improve effectiveness and transparency in the motor insurance claim process," he said.

Lim added that a follow-up consultation session with consumer groups, transport organisations, insurance companies and the Bar Council will be held before the proposed mechanism was presented to the Government early next year.

He said this in reply to Salahuddin Ayub (PAS-Kubang Kerian) who asked what action was taken against insurance companies that refused to provide third party coverage to motor vehicles aged 10 years and above, and the steps taken to address the problem at the Dewan Rakyat on Monday.

Lim said insurance companies and takaful operators were becoming more careful in offering motor insurance especially for high-risk vehicles such as those above 10 years.

"This is due to spiralling third party death and injury protection claims and the insurance companies' limited financial means," he said, adding that this situation could be observed from the trend in claims for vehicles above 10 years and those below 10 years.

"For example, industry statistics in 2009 show that the average claim for private vehicles older than 10 years is RM7,310 while for those below 10 years, the average claim is RM6,217," Lim said.

Similarly, he said the average claim for vehicles transporting goods older than 10 years was RM8,639 respectively while those below 10 years in age was RM7,351.

Lim added that the insurance industry had collaborated to offer motor insurance coverage via the Malaysian Motor Insurance Pool (MMIP) to ensure the public had more access to the service.

"As an insurer of the last resort, the MMIP cannot reject any application from vehicle owners," he said, adding that the losses borne by the MMIP were shared among all general insurers.

He said 35 MMIP branches had been expanded to 684 Pos Malaysia offices nationwide beginning July 1, 2009 to increase its accessibility to the public.

Source: The Star