Why can’t we insure trailers on standalone basis?

According to the Malaysian Motor Tariff section 6 (Commercial tariff), trailers may not be insured separately. But no one seems to know exactly what this phrase, “…may not be insured separately.”

  1. Is this to do with trailer and prime-mover must not be insured with different insurer? Or
  2. Is it about an insurer cannot issue separate policy for both the units?

Over the many years as the very old timers retired, no one seems to know the exact meaning….this requires someone to decipher the original meaning behind it. Reading the whole of section 6 – on prime-mover and trailer (including the understanding behind Specified and Unspecified trailers), we opt not to think so much of the original meaning…..best if we interpret the meaning from the formation of the words and sentences as they being laid.

cropped-readMy-Eyes.jpgIn this connection, it surely sounds like the insurer for both the trailer and prime-mover must be the same…….at least if you read “Laws” that was what the tariff section meant! The BASIC CONCEPT we can derive here – the insurer for both must be the same, and that is why the phrase, “trailer may not be insured separately” was coined in the opening phrase of this tariff section. It is really not about disallowing issuance of a separate policy as in 2. Disallowing issuance on separate policy simply was coined (I supposed…) in order to effectively enforce the objective 1 (depicted above) especially where the Insured owned more trailers than prime-movers, and also where some of the trailers are also attach to third party prime-movers.

Main reasons for the above contention as established were:

  1. Ensure there is no “GAPs” in cover between the Prime-Mover and the Trailer
  2. Situation of uncertainty as to which insurer should a third party related claim is to be successfully filed against, ie. against the insurer of the Prime-Mover or the insurer of the Trailer attaching to it at time of accident?

While we know these units cannot be insured by different insurers, but it is common thing that the trailers have their own registration with the Road Transport Department and the relevant licensing authority in addition to the licensing requirements of the prime-movers. Thus under licensing rules and regulations, these units are deemed to be separate and standalone interests. Henceforth from a practical standpoint, the insurance industry can NO LONGER enforce that both trailer and prime-mover’s insurance must be taken up with the same insurer at any one time. Moreover, the time period for roadtax for trailer and prime-movers may not be similar. There are just too many situations where trailer of another Insured were found attached to the prime-mover of another party…..what if there is an accident….do they actually massage the information so that a legitimate claim can be filed??

The time is ripe for trailers and prime-movers to be allowed insurance taken from different insurers.Perhaps some may argued that the following:

  1. There will be gaps in cover – BUT this is unlikely as motor is tariff and it is remote if gaps are only related to third party cover only,
  2. In event of an accident, the prime-mover reversed the attaching trailer and the latter hits into a third party, there will be uncertainty in claims intimated by third party claimant – BUT there should not be any unnecessary dispute to a moving vehicle…..the insurer insuring the prime-mover should be liable for the third party claim. On the contrary, what if the prime-mover and the attaching trailer are parked dangerously and caused a third party person an accident with the trailer? This should not posed any policy liability issues because the prime-mover’s insurer should be held liable, and it should be liable as far as the trailer is attached to the trailer. The principle is on “attachment liability” basis……

The insurance industry must be brave to move forward as we embrace, one day, the path to detariffication….. where there will be lesser restriction to doing business….

With this….should I said, “Cheers to the logistic industry….”? Let’s see…we need someone brutal to change the face of this industry.

 

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