If your corporation is operating a reasonable large fleet of buses, would you consider just buying all the third party insurance policies from Malaysian Motor Insurance Pool (MMIP) and then insure the non-third-party coverage with another insurance provider (the usual insurance company)? Don’t ask me the question of, “Can or cannot?” – just need to assume such form of splitting can be done…….. as of now. With most insurance companies, if not all, are throwing out buses, and with MMIP’s extra high premium loading, such splitting in coverage purchasing really makes good sense.
“….splitting of Motor Insurance cover into third-party liability and property…. really make sense, especially the liability part is purchased at MMIP with the other part with the conventional insurer”
Let’s do a simple analysis of the premiums chargeable under the above proposal.
|Premium tabulated based on the following assumptions:
The MMIP price tag shows a whopping RM15,000 odd premium for comprehensive and that’s for just one of your older buses! But just last year, your company was only paying some RM9,539.40 (before NCD) for the same vehicle!
Let’s be abit innovative, after deducting the third party insurance cover with MMIP of RM950.40, your company is left with a balance of RM14,312.64 for that same bus. There should be alot of constructive things those insurance companies can do with that balance amount of premium. Perhaps dangling a RM10,000 premium to the insurance companies can open up all possibilities…..
So what are the possibilities the insurance companies could be working on?
- They can sell you a Motor Insurance policy solely to cover both the own-damage and theft risks – this means the third party liability section of the Motor policy would be excluded together with those usual statutory attachments, or
- They can provide you with a Master Own-damage & Theft only policy, where only certificates would be issued for each and every vehicle declared. Likewise, coverage should be similar to those in item 1 above.
Option 2 looks much better when such offering can be tactically concealed from the markets and there less susceptible towards any complain that may exposes a Motor tariff breach! With a Master policy, the coverage can be disguised and clothed under the Equipment Insurance policy! Moreover, option 1 that includes the issuing of individual policy may create an outright breach of the motor tariff….. “Such offering can be tactically concealed from the markets…. least it is exposed to complaint for breach…. and a backlash from MMIP!”
Where can you buy insurance involving such SPLITTING of coverage! Trust me, I did come across such practice – there are indeed insurers out there providing you with such option, splitting the third party policy for MMIP and then insuring the non-liability covers with an insurance company that would issue your company with Master Motor (non-liability) policy and individual certificate issued for each and every declaration of those buses. Issuing a Master policy makes administration a lot more easier – the master policy can be packaged specifically as a facultative-obligatory surplus placement or merely procure an Excess of Loss protection on all such premiums retained in net account. These two forms of arrangement are preferred over just passing the risks on to their treaty programme – don’t want to arouse the markets…..
Anyway, the risk of doing so falls on the Insured….. you cannot get away when MMIP eventually finds out! What if this is right in the middle of a large claim surfacing! Let the buyer beware or…. was it “caveat emptor”? “But then, why not when you have about 100 units of buses!”
With all the insurance companies having equal shares, those that are the lesser motor players would be feeling the heat if such selective purchasing becomes rampant.