KL appeals court finds insurers of Malaysian vehicles not liable for passengers if no coverage

KL appeals court finds insurers of Malaysian vehicles not liable for passengers if no coverage

Insurers of Malaysian cars involved in accidents in Singapore stand to be exempted from passenger liability after a key ruling was passed by a Malaysian appeals court.

It reversed a Kuala Lumpur High Court decision, in finding that a passenger who suffered serious head injuries here in a 2010 accident is not entitled to claim compensation from the insurer because the Malaysian-registered car had a policy which did not cover its passengers.

This was despite Singapore's Motor Vehicles (Third-Party Risks and Compensation) Act, which makes it compulsory for private vehicle owners to insure liability for passengers. Malaysia has no similar compulsory coverage provision.

Madam Zuraini Mohamed suffered severe head injuries when the car driven by her husband, Mr Iskandar Mohd Nuli, collided with a lorry on Mandai Road. She sued both her husband and lorry driver Ng Kar Sze in 2013, seeking damages in a Singapore High Court case due to start in May.

Meanwhile, the car's insurer, AmGeneral Insurance, sought a declaration of non-liability. But the KL High Court ruled AmGeneral was bound by a Singapore agreement to meet the passenger liability, despite the fact that the car owner did not pay premiums for the coverage.

AmGeneral, represented by Singapore lawyer Niru Pillai here and Malaysian counsel W. Davidson, appealed.

In that hearing, Mr Iskandar's lawyer, Mr Ariff Rozhan, pointed to the reciprocal arrangement between the Motor Insurers Bureau of Singapore(MIBS) and its Malaysian counterpart. This requires the MIBS to settle any judgment sum not paid by a driver of an uninsured Malaysian vehicle entering Singapore who is held liable for an accident here.

The appeals court acknowledged a 2013 Singapore High Court case which held a Malaysian insurer was obliged to settle despite the lack of insurance coverage. It was held that if the MIBS was obliged to pay under the agreement with its Malaysian counterpart, then it could claim from the insurer in the case.

But the Malaysian appeals court ruled that this was "not the issue in this appeal". The court made clear that the special agreement does not alter an insurer's rights under the policy and preserved AmGeneral's rights in Mr Iskandar's case.

Effectively, this means that even if AmGeneral pays the MIBS, it has the right to recover the sum from Mr Iskandar. The court added that Mr Iskandar's claim that he "had no knowledge of the policy's non-coverage" was immaterial, and that he must take the policy "with all its disadvantages from his point of view, together with its advantages, and he cannot claim the benefit of anything which the policy gives him without complying with its terms".

Mr Iskandar is currently seeking permission to appeal to the Malaysian Federal Court and a hearing is due next month.

It is understood that the Malaysian judgment means passengers or pillion riders injured on Malaysian-registered vehicles in Singapore will not be compensated for injuries by insurers if the vehicle is not covered for passenger liability.

It is understood that the Malaysian judgment means passengers or pillion riders injured on Malaysian-registered vehicles in Singapore will not be compensated for injuries by insurers if the vehicle is not covered for passenger liability.

Malaysian Judge of Appeal Vernon Ong, in the court's judgment grounds released in January, wrote: "The granting of the declaration will serve a useful purpose as it will be helpful to the parties and to the public."

Sensible solutions for taxis and ride-hailing services – CY Ming

Sensible solutions for taxis and ride-hailing services – CY Ming

Published: 1 February 2016 7:00 AM

Deputy Transport Minister Datuk Abdul Aziz Kaprawi said the government will make it compulsory for drivers of ride-hailing services such as Uber and GrabCar to buy commercial insurance just like taxi operators in order to operate legally.

He disclosed that the Land Public Transport Commission (SPAD) is still in the midst of discussions to regulate the industry, which included making it mandatory for Uber and GrabCar vehicles to undergo periodic computerised inspections at Puspakom.

These measures were aimed at legalising the industry and regulating the operators. He said this is to ensure private vehicles are safe for people to ride in, as the number of phone apps will continue to grow.

However, it should be noted that issues surrounding ride-hailing apps and taxis are highly complicated, otherwise they would have been resolved long ago. The matters mentioned by the deputy minister need to be addressed point-by-point.

The term "commercial vehicle" is clear as these vehicles transport goods or passengers for a fee, except for vehicles rented out by car rental companies. They may be commercial vehicles but customers can only drive them for private use.

Aziz stated "commercial insurance", which is rather confusing, as the most common types cover damages to business property, third parties and workers' compensation.

If he meant commercial vehicle insurance, then there are many types.

Under the Motor Tariff for cars alone, they are categorised under Public Taxis (licensed under Teksi Bermeter or Kereta Sewa), Hire Cars – Chauffeur Driven (licensed under Teksi Limousin), and Hire Cars – Hirer Driving (licensed as Kereta Sewa Pandu).

The Motor Tariff has been in use since 1978 and for a long time, the rates were RM69.80, RM102.50 and RM122.10 for every RM1,000 cover for public taxis, limousine taxis and rental cars respectively, compared with RM26 for private vehicles.

Would insurance companies accept public taxi premiums to insure private vehicles used for Uber or GrabCar services when they are collecting much higher premiums for limousine taxis and rental cars?

These limousine taxis and rental cars look exactly like private cars and are used for chauffeur-driven services, just like GrabCar and Uber. Insurers also charge an additional RM78 for limousine taxis and RM240 for rental cars as premiums for "Passenger Risk Cover" for four adults.

Even if vehicles used for Uber and GrabCar services are covered for legal liability to passengers, those injured inside the car may not receive a single sen in compensation.

Very few people are aware that passengers in buses and taxis are not insured at all. The compulsory insurance for all motor vehicles, including buses and taxis, is to insure the driver for legal liability when sued by injured parties.

For example, passengers injured in a taxi through no fault of the driver would have to sue the driver of the other vehicle that crashed into the taxi. The same applies to a GrabCar or Uber vehicle even with "Passenger Risk" cover.

Should the driver of the taxi or private car was at fault and insured for "Passenger Risk", the insurance company could still withdraw the legal liability cover if the driver was found driving under the influence of drugs or alcohol, or violated one of the many clauses included in the terms and conditions of the motor insurance policy.

Also, injured victims would have to wait many years for the court to award compensation and receive payment from the insurance company. Under existing laws, most accident victims suffered a double blow, one for the injury and the other the long agonising wait for compensation.

The legal liability insurance should be replaced with Personal Accident Insurance (PAI) as compensations are speedily paid out without having to establish fault. A RM100,000 cover may not be adequate for the rich or high-income earners but they are likely to have their own life and general insurance.

Together with RM20,000 cover for medical expenses, many injured victims can seek treatment at private hospitals.  

What the Transport Ministry should do is to amend antiquated laws requiring all motor vehicles to be insured for third party injuries, and public service vehicles such as buses and taxis to be covered for legal liability to passengers, be replaced by PAI cover.

And the only way for private cars to provide transport for a fee legally is to amend existing laws.As all commercial vehicles are under the purview of SPAD under the Prime Minister's Department, the Transport Ministry will have to work with SPAD and not issue statements on its behalf.

SPAD was fully operational on January 31, 2011 and since inception had not added more metered taxi permits in the Klang Valley due to the oversupply. If private cars are allowed to provide transport for a fee, taxi permits should also be granted to any individual that qualifies.

Those choosing to operate taxis may purchase new vehicles with excise duty exemption but pay higher motor insurance premiums and regulated by SPAD. Drivers preferring to offer ride-hailing services using private cars are to pay excise duty and private car insurance, and regulated by phone apps.

In any case, safety is determined by many factors that affect the driver, vehicle, road, weather and traffic conditions, and not by insurance or whether the service is provided by taxi or private car.

Reducing the frequency of vehicle inspection at Puspakom from six months to a year may increase taxi driver's income for a day but at the expense of safety, particularly when taxis are old.

After the initial inspection, the first three routine inspections can be conducted once annually, and after that every six months during the fourth and fifth year. Taxis operating beyond that should be subjected to inspections every three months.

This will encourage operators to change their taxis every three or five years.

The same applies to private vehicles offering ride-hailing services. – February 1, 2016.

* CY Ming reads The Malaysian Insider.

* This is the personal opinion of the writer, organisation or publication and does not necessarily represent the views of The Malaysian Insider

- See more at: http://www.themalaysianinsider.com/sideviews/article/sensible-solutions-for-taxis-and-ride-hailing-services-cy-ming#sthash.FxA35bnJ.dpuf

Taking insurer to Consumer Tribunal

Taking insurer to Consumer Tribunal

Published on: Thursday, January 28, 2016

Kota Kinabalu: A TANJUNG ARU resident has turned down the compensation from a Kuala Lumpur-based insurance company for the damage to his front gate, after waiting three months and only being told verbally how much he will be getting as compensation.

The amount the insurer, Liberty Insurance, was willing to pay for the damage caused by a client of the firm was only RM1,000 – RM431 short of the amount needed to replace the mechanism in the electric gate that was damaged.

"What the insurance firm is telling me is that it is my fault that its client rammed her car through my closed electric gate and that I have to subsidise on behalf the company.

"To me, this sounds like it is a cheap skate insurer that is failing to live up to its image. I know times are hard but shortchanging an innocent victim of RM431 is unethical.

"How it came to the conclusion that it will not fully compensate me for the damage when it did not even bother to send over an adjustor to inspect the damage is shocking," said the complainant, JS.

The electrical mechanism for the gate had not been functioning as it used to ever since a woman driver rammed into it last September.

The owner submitted a quotation for the repairs, asking for RM 1,431, to be paid direct to the firm that installed the electric gate that same month, so that it could be fixed soonest possible.

When no offer was forthcoming from the firm by the beginning of January, he turned to Hotline for help.

A spokeswoman for the Kota Kinabalu branch of the firm said a check of its records revealed that an offer of RM1, 000 was approved by its headquarters on Jan. 6.

"There was some difficulty in processing his claim as the print outs of the Closed Circuit Television (CCTV) screen grabs of the accident were not very clear," she said.

"Our adjustor contacted him by phone some time after we received his claim, requesting for clearer copies of these photographs."

She said a letter of discharge was mailed to the homeowner, together with the company's offer.

"He will have to sign the letter of discharge before the compensation can be paid out.

"If he is not satisfied with the offer, he should write a letter of appeal to our headquarters, stating the amount he wishes to receive.

"We will reconsider the sum, before making a counter-offer." JS bemoaned the added headache of having to appeal the offer in writing.

"I was made to wait three months with the prospect of having a faulty gate. In view of the risky neighbourhood as it is populated by squatters, I had an electrician to do remedial repairs also at my own expenses.

"Still, the movement of the gate had slowed down considerably compared to how easily it used to open before because the lower arms of the gate were damaged in the accident.

"What was also surprising was that I was asked to produce colour printouts of the cctv footage when the incident happened at 9pm. Besides, I am not aware of cctv footages being in colour.

"I went through the hassle of making a police report, tracking down the driver's details and getting an estimate of the repairs.

"On top of this, I had to wait for months to hear back about the offer from the company."

"I have decided to replace the mechanism at my own expense and pursue the matter in the Consumer Claims Tribunal, instead."

Motor insurance premiums to be risk-based from 2016

Motor insurance premiums to be risk-based from 2016

In Cars, Local News / By Jonathan James Tan / 27 October 2014 4:46 pm / 61 comments

Motor insurance premiums are set to be based on a list of risk factors when the industry is de-tariffed in 2016, Bank Negara Malaysia (BNM) has said, according to a report by The Sun.

Various risk factors not included in the current motor tariff, such as residence location, vehicle make and model, use of vehicle, occupation of owner, claims history, gender and age will be taken into consideration, similar to the system employed in countries like the UK.

In other words, the insurance premium rates you pay will depend on how much risk you are perceived to carry – for instance, owners of makes and models with high reported theft rates, owners of high-performance vehicles, owners with fewer years of driving experience or those who live in crime-prone areas will have to pay higher premiums.

The central bank told the daily that it is working together with motor insurance players to come up with a de-tariffing roadmap that will see a more risk-based pricing of premiums.

“As motor insurance is a compulsory cover, it is important that the de-tariffication approach does not significantly impact the motoring public and disrupt access to cover,” BNM told The Sun. Simply adjusting premiums in proportion with increasing motor insurance claims is not sustainable in the long term, the central bank added.

Indeed, according to the General Insurance Association of Malaysia (PIAM), in 2013, motor insurers paid out nearly RM1.3 billion in third-party bodily injuries (+12% over 2012), RM295 million in third-party property damage (+28%) and RM627 million in total for motor thefts (+21% over 2012).

That was last year. This year, in the first quarter alone, net claims paid out for bodily injury and property damage due to road accidents amounted to RM1.384 billion. Clearly, all of these contribute huge losses to motor insurers.

As such, the insurance and transport industries, along with motorists and other relevant agencies, should work together to promote safer driving, reduce accident rates and create greater awareness on road safety, BNM told The Sun, pointing out that in doing so, insurance payouts can potentially be minimised, leading eventually to lower premium rates.

In 2011, the central bank announced the New Motor Cover Framework. Under this framework, Malaysia’s motor tariff premiums would be revised gradually beginning January 2012, to eventually culminate in the abolition of tariffs in 2016. Premium rates will then depend entirely on market forces.

Meanwhile, all general insurance products purchased, including motor cover, will be subject to the Goods and Services Tax (GST) from April 1, 2015, BNM told the daily.

New motor insurance tariffs effective February 15, 2014

New motor insurance tariffs effective February 15, 2014

Car Insurance In Malaysia – The Different Types Of Motor Insurance

Car Insurance In Malaysia – The Different Types Of Motor Insurance

In Malaysia, having a carriage that brings us around is almost a means of survival. While we are eager to select the motor vehicle of our choice, selecting the type of motor insurance is equally vital. Knowing the differences in car insurance out there as well as knowing the coverage of each insurance is essential in protecting our interest in the long-run.

In principle, there are three types of car insurance in Malaysia, ranging from the most basic protection to the one that gives an in-depth assurance to its driver.

Third Party Cover

In the insurance world, the “first party” is you (i.e. the driver), the “second party” is the motor insurance company and the “third party” is basically everyone else. A Third Party Cover insures you against any injuries or deaths caused to another person, as well as loss or damage to a third party property caused by your vehicle.

In essence, a Third Party Cover provides the minimum level of protection to you in the event of an accident. With a Third Party Cover, you cannot claim for any damages to your own vehicle. As such, this type of policy is normally offered at a cheaper premium as compared with a Comprehensive Cover (see below). Third Party Insurance is the minimum level of coverage a driver needs in order to renew his or her road tax and legally drive on the road.

People who normally seek Third Party Coverage are those whose cars are old or no longer under a financing arrangement (e.g. hire purchase). Even though Third Party Cover comes with a cheaper price tag, older cars tend to be more accident-prone, which means it could end up costing more over the long run.

The process to obtaining a Third Party Car Insurance is a little bit more complicated, as most insurance companies prefer to deal with Comprehensive Covers. This is due partly to the recent rise in road accidents and claims cost, which had made Third Party Covers less profitable for insurance companies. In addition, it is rather difficult to estimate the value of old vehicles, which is needed to work out the premium on the insurance.

For those who are looking at Third Party Car Insurance, there might be a “premium load” which a driver has to bear. The “premium load” is an extra amount added to the insurance premium to reflect a higher risk. Some insurance companies may require the driver to get other forms of insurance coverage (such as a Personal Accident Insurance) in order to secure a Third Party Policy. In order to improve your chance of getting a Third Party Cover, it is advisable to remain with one insurer for both motor and non-motor coverage, and maintain a good track record in all accounts.

Third Party, Fire and Theft Cover

A Third Party, Fire and Theft policy is more affordable than a Comprehensive Cover, but pricier than a Third Party Cover.

Essentially what this policy does is it protects you (i.e. the driver) against claims by a third party, be it bodily injuries or death, third-party property loss or damage caused by your vehicle. This is essentially the same as a Third Party Cover, but with the added coverage of damages from fire and theft of your vehicle.

Normally, in a Third Party, Fire and Theft Cover, the insured amount for third party damages is high (sometimes unlimited), but the insured amount on fire and theft is lower.

Comprehensive Car Insurance Cover

A Comprehensive Car Insurance package covers a wider range of protection, notably to both first and third parties (first party is you, the driver, while third party is everyone else). With a Comprehensive Cover, you basically enjoy the same coverage as in a Third Party, Fire and Theft policy, but with the added coverage of damages to your own vehicle (i.e. not just limited to fire and theft).

In the car insurance industry, the standard practice for stolen vehicles or total loss claims is to compensate the policyholder based on the market value of the vehicle at the time of loss (or damage), or the sum agreed in the policy, whichever is lower. Some insurance companies however reimburse the policyholder based on an agreed car value specified in advance in an agreement with the policyholder, rather than the normal market or resale value.

However, bear in mind that not everyone can obtain a Comprehensive Cover, as this policy is normally only available to vehicles that have not exceeded a certain age. It is generally advisable to obtain a Comprehensive Cover if you own a relatively expensive car, as the more valuable your car is, the more significant this policy package will be for the driver.

Note that in all three car insurance packages outline above, none of them provides protection to injury or death sustained by the driver or passenger of the policyholder.

Summary of the Types of Car Insurance in Malaysia

Check out the different car insurance provided by the motor insurance companies in Malaysia.

Car insurance in Malaysia to go up by 6 per cent

PETALING JAYA - Car insurance is set to go up by 6 per cent as insurance providers fall under the Goods and Services tax (GST) come April 1.

"Insurance will go up. But don't listen to rumours that road tax will go up too. It will not," said GST director Datuk Subromaniam Tholasy said yesterday.

However, those renewing their road tax at the post office will pay GST on the post office's RM2 (S$0.75) commission, which amounts to 12 sen.

Customs deputy director Tan Sim Kiat urged Malaysians not to fall for "marketing schemes" which sensationalised the GST.

"If your insurance premium is RM500, then 6 per cent is RM30. Calculate the costs first - don't get excited and rush out to buy things," he said.

On another matter, Subromaniam also reminded residents that neighbourhood security would fall under the tax system although condominium maintenance fees are GST-exempt.

Security companies providing services to residential areas will fall under the GST, and accordingly, fees could go up by 6 per cent.

If the guards are hired by the residents' association, neighbourhoods may escape the 6 per cent hike if the RA does not pull in more than RM500,000 a year, which is the threshold amount for GST registration.

"But if they make RM500,000 or more, then the residents' association will have to register and charge residents accordingly for neighbourhood guard services," Subromaniam said.

"But condominiums' joint management bodies and management corporations are exempted, as is strata title."

Meanwhile, Bernama quoted Domestic Trade, Cooperatives and Consumerism Minister Datuk Seri Hasan Malek as saying that five special GST courts had been set up to handle cases against traders under the Price Control and Anti Profiteering Act.

He said consumers must monitor the prices of goods to avoid being cheated.

If there are traders who impose GST on goods which are tax exempt, the public should report the matter to the authorities, he said.

- See more at: http://news.asiaone.com/news/malaysia/car-insurance-malaysia-go-6-cent#sthash.YogiWvvZ.dpuf

Used car dealers to reap good deals

Published on: Friday, February 27, 2015

http://www.dailyexpress.com.my/news.cfm?NewsID=97435

Kota Kinabalu: Used car dealers here are expected to reap good business despite an upward revision of motor insurance premiums until 2016.

According to them, used car prices will remain the same despite the upward revision which is part of the New Motor Cover Framework introduced by Bank Negara to address issues in the motor insurance premium sector.

The revision is also part of the effort to de-tariff the premiums and is done on four-year adjustments from 2012 to 2016, with the increases being around the same amount each year.

The latest revision came on Feb 23.

Malaysia Used Vehicle Autoparts Traders Association Executive Secretary, Lee Cheong Boo, said Malaysian used cars are a boon to foreigners especially those from the Middle East and African countries.

The same sentiments are voiced by city car dealers here who have enjoyed good business for years from locals.

JW Motors representative one Raymond said used car dealers offered better deals, some include zero per cent car deposits, with additional rebates and discounts being thrown in so buyers could not resist their offer.

"Used car dealers still have the power to adjust the prices of the cars and insurance agents could also offer some form of rebates to assist used car buyers," he said.

An insurance agent claimed talks have been circulating among players in the industry that companies are not making a profit from the motor insurance premiums although the sector registered a 5.4 per cent growth last year with a total payout on claims amounting to RM5.04 billion.

"Now the revision is one of the Bank Negara's ways to provide some leeway for insurance company to earn profits," he claimed.

The General Insurance Association of Malaysia (Piam) has clarified the adjustments will pave the way to de-tariff of the premiums, which will see rates are differed according to risks of individual vehicles.

According to a renowned auto industry observer, Paul Tan, the de-tariffing will see those with good claims enjoy much better premiums than those with a higher risk profile.

"When that happens, premium rates will be further differentiated in accordance to the individual risk profile of vehicles, owners, as well as potential pricing differences between insurers.

"When the de-tariffing comes into effect, we might see the emergence of 'full service' insurers with higher rates but more perks such as complementary tow truck service, as well as 'budget no frills' insurers," he said in his blog.

He claimed the move could also see the potential pricing difference between insurers with the emergence of agents offering the "full service" with a higher rates but more perks type to the 'budget no frills' type.

PIAM statement on motor insurance premium increase In Cars

Local News / By Anthony Lim / 18 February 2015 1:45 pm /

Last week, we published the new 2015 motor tariff premium rates that are set to come into effect on February 23. As it did last year, the General Insurance Association of Malaysia (PIAM) has clarified that the latest revisions to the motor insurance premiums is a continuation of a four-year adjustment that began in 2012.

The tariff revision – applicable for policies purchased or renewed beginning from the scheduled date, and only for private cars, public taxis and express buses – is part of the New Motor Cover framework, which was introduced by Bank Negara Malaysia to address the structural issues within the motor insurance sector.

The framework will pave the way for the detariffing of motor insurance premiums in 2016, in which premium rates will be further differentiated in accordance to the risk profile of individual vehicles. Those with good claims experience will enjoy much better premium rates than those with a higher risk profile.

The move could also well see potential pricing differences between insurers, as well as the emergence of ‘full service’ insurers – with higher rates, but with more perks such as complimentary tow truck service – and ‘budget no-frills’ insurers.

Motor insurance is of course the dominant business line for general insurers in Malaysia, registering a steady 5.4% growth for 2014. The industry paid out RM5.04 billion in motor insurance claims last year.

You can compare the new 2015 motor tariff premium rates in the tables seen here with that of the existing rates from 2014, which remain in effect until this Sunday. Below is the PIAM statement on the motor insurance premium adjustment.

The General Insurance Association of Malaysia (PIAM) wishes to clarify that the latest revision to Motor Insurance Premium is a continuation of Motor Tariff premium rate adjustments under the New Motor Cover Framework introduced in 2012.

The New Motor Cover Framework was introduced by Bank Negara Malaysia to address the structural issues within the motor insurance sector, i.e. to enhance efficiency in the provision of motor cover by the industry with a gradual price adjustment that will ensure that public is able to purchase motor insurance at affordable premiums.

The adjustments on Motor Tariff premium rates for 2015 will take effect from 23 February. These adjustment were announced by Bank Negara Malaysia in early February 2015 and will be applicable for policies purchased or renewed beginning 23 February 2015. The revisions are only applicable to private cars, public taxis and express buses. The rates for other types of vehicles remain the same.

The New Motor Cover Framework is a positive step towards promoting a liberalised insurance sector with further measures taken to improve the motor insurance and claims settlement processes. Moving forward the industry will play a more active role in improving road safety by working jointly with MIROS and other stakeholders to inculcate good driving behavior and practices among all road users.

PIAM has also implemented the Accident Assist Call Centre (AACC) service to provide emergency assistance to the motoring public involved in road accidents. The 24 by 7 hotline 1300-22-11-88 offers accident towing services and attends to claims enquiries to help accident victims nationwide.

Read more: http://paultan.org/2015/02/18/piam-statement-on-motor-insurance-premium-increase/#ixzz3SMqUYvoS

 

Revision of motor insurance a continuation of rate adjustments, says PIAM

KUALA LUMPUR: The General Insurance Association of Malaysia (PIAM) clarified today that the revised motor insurance premium was a continuation of the motor tariff premium rate adjustments under the new motor framework.

It said the adjustments of motor tariff premium rates for 2015 would take effect from Feb 23, as announced recently by Bank Negara Malaysia.

"The revisions are only applicable to private cars, public taxis and express buses while the rates for other types of vehicles will remain the same," it said in a statement.

The adjustment would be applicable for policies purchased or renewed beginning Feb 23.

The framework, introduced by Bank Negara in 2012, would not only address the structural issues within the motor insurance sector but also promote a liberalised insurance sector, the central bank added.

http://www.thestar.com.my/Business/Business-News/2015/02/17/Revision-of-motor-insurance-a-continuation-of-rate-adjustments-says-PIAM/?style=biz