'Insurers must provide private car mart value'

Insurers and takaful operators are required to advise consumers on the appropriate market value of motor vehicles when
purchasing a comprehensive motor insurance cover for private cars from today.

In a statement, Bank Negara Malaysia (BNM) said the measure aimed to address the issue of over- or under-insurance of motor vehicles, which could result in consumers paying higher-than-necessary premiums or receiving a lower compensation following a claim against the insurance policy.

"They are required to advise consumers on the present market value of the private car, the importance of insuring the motor vehicle at the appropriate market value and the effect of over-insurance and under-insurance when a claim is made," it said.

BNM said the advice to consumers on the present market value must be based on the ISM Automobile Business Intelligence System or any other credible vehicle valuation database.


"The present market value of the vehicle will be indicated in the renewal notice or product disclosure sheet that is issued to consumers," it said.

It said to ensure consistency in the market value of an insured vehicle at the point of insurance and subsequent claim, insurers were required to refer to the same database to determine the market value of the vehicle for both instances.

However, BNM said, the database excluded commercial vehicles and
motorcycles. BNM said the new measure would contribute towards more objective determination of the market value of motor vehicles for purposes of purchasing motor insurance and claims settlement.

"This complements existing measures that promote the fair treatment of consumers, including requirements for insurers and their agents to explain the main features of a motor policy, including the type of cover, scope of cover and exclusions, contractual rights and obligations of consumers as well as claims
procedures," it said. -- Bernama