PIAM (Persatuan Insurans Am Malaysia) has published additional information on the Detariffication this month for motor insurance and fire insurance. If you do not know about Detariffication, check out our video below covering frequently asked questions about what it is and how it will effect your car or motorcycle insurance.
So, why has nothing changed?
Malaysia’s Detariffication is now also called “Phased Liberalisation” and has officially launched in “phases” this month. This is to emphasize that it will not change in a big bang approach like in India or China, where it had created a lot of problems for the insurance companies there.
Starting from this month onward, insurance companies are allowed to introduce new products for Motor and Fire insurance. This means that you will start to see new products being introduced under the car and fire insurance in the market very soon. However the existing motor insurance, the prices are still fixed by the government. So when you renew your car policy, you will not see a lot of difference in terms of pricing among the various insurance companies.
Insurance for Third Party will increase
Prices for Motor Comprehensive (MC) and Motor Third Party Fire and Theft (TP&FT) remain the same. Changes will only occur a year after the launch of the first phase, that is around July 2017. However, it is bad news for Third Party policy holders (TP), as the premium prices will start to experience an increase in stages starting this year.
If you are not familiar with the different types of motor insurance policies, below is a quick video explaining this.
You can find the article by PIAM here: “Top 10 things that you should know about the implementation of phased liberalisation of motor and fire tariffs”
Let’s wait till 2017 for changes
For now nothing has changed in the pricing of motor insurance. Insurance companies are still bound by the fixed prices (tariffs) that are set by the regulator. This is both good and bad news. Good news is that nothing has changed for now. Everything remains as it is. However, for the safe and careful drivers out there, who will benefit most from Motor Detariffication, you will only be able to start saving money from a lower premium rate next year.