Better Deal for Motorists

Better Deal for Motorists

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One of the many frustrating things for a motorist in Malaysia has been to get hit by another vehicle and not be able to get compensation easily from the other party (if the other party is guilty). Either compensation can be received on the spot if it’s a small amount or, as provided by the law, you can submit a claim to the other party’s insurance company. The problem is that such an approach can take ‘forever’ unless it is a big claim or one which goes to court.

Because of the hassles involved in making a claim to another insurance company, many motorists usually decide not to bother and spend their own money on repairs. So the insurance companies win through their lax way of responding to claims.

It is also possible to claim for compensation from your own insurance company but that means you lose your precious NCD – the No Claims Discount that can be as high as 55% after 5 years – and for many people, maintaining the NCD is often a greater priority. So they also avoid from making a claim unless the damage is so severe that the cost is going to be very high.

Now the insurance industry has come up with a new option that is one of the rare times when motorists get a decent compensation provision. Motorists can now claim from their own insurance company for damages cause by other parties if they themselves are not the gulity party – without losing their NCD.

PIAM, the insurance industry association, says that this new option, which came into effect on June 1st 2001, is aimed at helping motorists expedite their claims. However, it only covers damage to the vehicle and not other types of claims concerning loss of life or damage to other properties. As with all accidents, a police report has still to be made and the findings of the police will determine whether the motorist can claim under this new option.

This new option also reduces the risk of a motorist suddenly losing his or her NCD if someone makes a claim for damages through his insurance company. Although the motorist himself may not make a claim, any sort of claim from another party is also considered a claim and the policyholder still loses the NCD completely.

While this move will be welcome by motorists – no more hassles trying to find out the other party’s insurance company and submitting a claim – it could also have serious implications on the insurance industry which always claims to be losing money in its automobile side of the business. Where many claims may not have been made in the past as motorists simply did not want to go through the hassles, there may now be more claims made, especially when loss of the NCD is not an issue.

However, it should also be remembered that many policies have a clause which requires the policyholder to bear the first few hundred or thousand ringgit of a claim, so it won’t be much point making a claim for a broken headlamp!

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