Hi Kin Lian,
Just to share with you my personal experience on the above. Faithfully, I drive safely for my personal and passengers' safety and earn no claim discount on my insurance premium. It reached the maximum of 50% within the first few years of owning/driving a car.
After 25 years of paying insurance premium, I feel like one of the loyal contributors to the pool for the sake of other not-so careful motorists and unfortunate injured persons. Insurers love to have us as we just pay and don't have to claim. But they don't differentiate us from other motorists.
Insurers made losses from motor insurance of which I did not have anything to do with it, yet I have to bear with adjustments in premium that they enforce to all insured parties.
Beside giving up owning a car, do you have any advice for me to look into for the sake of saving in motor insurance premium?
PT
REPLY
If your insurer increase the premium, you can look for another insurer who may be able to offer you a lower premium. The hotline numbers are shown in the FAQ:
http://www.tankinlian.com/faq/motord.html
Most people will not buy term insurance because there is no cash value.Why? I guess most are clueless about what insurance is really about.
ReplyDeleteFor Mr. PT's case here don't you think he should also be entitled to cash value after all he has a clean driving record.Can you imagine the total premium would have come to and compounded at the rate of 3.5% for 25 year like endowment plan?
Although he contributes to the risk pool he takes every precaution that the his risk is minimised and yet he is penalised from increased premium. People like him deserves at least a refund of his premium. Motor insurance is also an insurance albeit another name.
The question is why people are not clamouring for cash value for car insurance. Why are they resigned to it?
Dear Zhu,
ReplyDeleteI have been in the insurance business for 25 years, there are areas I am still blur and still is learning. So it is surprising that most of us are clueless of what insurance is all about.
Zhu, motor policy is basically a 1-year term assurance. At expiry of the 1-year term you can renew the policy on terms and conditions set by the insurer. If you are happy with them you are at liberty to look for another one.
Zhu, if you made no claim during the 1 year, you are entitled to a no claim bonus of your renewed premium. This is some kind of a bonus for not making any claims during the year. If you decide the terminate the policy during the 1 year period, the insurer will refund you the premium based on a certained agreed scale. This is something like your CSV.
As you can see it is just like life insurance except that motor is 1-year term policy.
Zhu, insurer do not refund the entire premium when there is no claim because part of the premium is used to cover expenses like commissons, management expenses, reward to the insurer for taking the risk and cost of insurance.
I agree with you those who do not make claims should enjoy lower premiums. This is not possible because most insurers do not classify their new risk according to those who do not claim and those who claim. They just lump everything into one pot. As a result, those do not make claims are in a way subsidising those who claim.
In Malaysia, the Takaful companies (so-called Islamic insurance)give not only no claim discount but distribute the profits (if any) of the motor business with the policyholders based on a agreed proportion. The conventional motor insurers take all the profits.