A member of the Malaysian Parliament has voiced concerns that the impending liberalisation of the country’s motor insurance sector could end up further disadvantaging poorer vehicle owners.
According to Klang MP Charles Santiago, one of the factors that will be used to determine premium rates under the new scheme, which takes effect on July 01, is the geographical location of the vehicle. Vehicles located in areas with higher incidences of theft may cost more to insure.
Residents living in low-cost housing projects, which are more crime-prone, will have to pay more for auto insurance, Santiago noted.
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He added that the lack of parking spaces, which forces residents to park their cars on the roads, contributes to higher theft incidences.
“So it looks like the risk factor of being poor is high,” he told
Free Malaysia Today. “It looks like it has become costly to be poor.
“Over the years, poor public transportation planning has forced many people to buy vehicles, especially the working class, just so they can get to work on time and be mobile,” Santiago explained. “Sadly, it seems the extra payment for risk will now come from the meagre wages of the working class, making them poorer than they already are.”
According to information from Bank Negara Malaysia’s website, premium rates will take into account several factors, including safety and security features in a vehicle, the duration the vehicle is on the road, traffic violations the vehicle is involved in, and the geographical location of the vehicle.
The central bank said that motor policy premiums will vary from insurer to insurer because each company has a different way of defining risk profile groups.
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