A disruptive ride coming up for the insurance industry 

Time is really changing….not sure for the better or for worse. Numerous disruptive initiatives were being proposed over the last couple of months, some of which are almost a reality. Examples would be e-hailing industry pushing for e-hailing motor insurance taking opportunity of the gomen legislating e-hailing, automotive franchise innovating on aggregator platform and GetCover may get livelier in the coming months with some breakthrough in MLM-type agency. Not forgetting the hefty RM 213 million fines imposed by MyCC recently. 

Legislating and legalising e-hailing 

This means an official nod for Uber and Grab….expected to be gazetted on 1 April, this also mean the need to have the motor insurance policy extended for passengers cover while on e-hailing. This brings some excitement for the GI industry for more premium to be collected from this extension (that’s what we all thought). ….that’s not going to happen. Those in e-hailing and those working towards legalising ? industry are not about to stop at this. They wanted the cover to be separated from the existing motor policy. They had proposed to have a standard e-hailing policy.… to be underwritten by a single insurer. Citing privacy data issues they were not able to adopt what the industry had proposed. This was also argued on ground of cost and operational inefficiency dealing with numerous insurers. 

But the GI industry is expected to disagree ….to the bone, perhaps. Let’s see how…. 

The Passenger’s Risks for now…. 

Are passenger risks (if extended in policy) not covered whilst under e-hailing for now at least not until 1st April 2017? 

There is always this bugging issue when coming to such question…. Many would have just agree cover is not allowed and claim voidable/outrightly void when injury to passenger occurred during such e-hailing ride. 

The ASK factor in Schedule 9….

There are two sides to this, (one)…. e-hailing activities are already a common thing, thus to an extent insurer should ask in their proposal form if he/she is using the car for e-hailing. Decision can be made to avoid acceptance or to highlight to them to what extent e-hailing risks are void…. The gomen has continually pointed out that the usual drivers are under the B40 category of the population…. If such question on e-hailing activities is not asked then Schedule 9 FSA may forbid insurer from using limitation as to vehicle use and also the presence of the exclusion on hire and rewards, for not paying injury claims to e-hailing passengers. 

“With almost 700,000 e-hailing drivers, insurers cannot assume none of their policyholders is involved in e-hailing…. knowingly the peril for doing so, will surely mean they are not allowed the avoidance of liabilities to the passengers.”

(Two)….  S91 RTA cited that liability to passenger being carried (in as far as insurance is concerned) is automatically in operation by laws once the hire and reward activities are being carried out with the use of the vehicle. This is inspite the fact the vehicle was registered as a private vehicle and not for carrying passengers for reward. 

The phraseology used in that section is such that insurers need not provide passenger cover if the said vehicle is not used in any hire and reward arrangement but if it was, then such cover is deemed having been provided or rather the insurer is subject to the avoidance clause as is being stated in the policy wordings…. (refer to the previous writeup on know your rights as a passenger in the motor-vehicle)

So….  simple conclusion, even if insurer is not supposed to be on risk for TPBI to passengers being carried in any e-hailing pickup for reasons that the extension cover for passengers was not purchased or by virtue that the hire and rewards exclusion is an inherent part of the policy, this cannot be assumed to be true if the Insurer has the opportunity to ask the necessary question before acceptance but failed to do so. The insurer must ask if the policyholder’s car is to be used for e-hailing and if the question was asked the answer should be documented onto the policy schedule for transparency. 

Next discussion we should be talking about how this new e-hailing policy works, both the good sides and the bad ones…., from both industry and consumer perspectives. 

Happy weekend! 

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3 comments for “A disruptive ride coming up for the insurance industry 

  1. Catherine Wang
    March 30, 2017 at 07:44

    Is it really true that e-hailing activities are not covered by the motor insurance policy?

  2. Camilia
    March 23, 2017 at 00:55

    You mean if insurance company don’t ask if the policyholder is a uber driver during when purchase insurance then on claim, insurance co. cannot deny claim?

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