The phased liberalisation of motor and fire tariffs announced by Bank Negara Malaysia (BNM) saw premium rates for motor comprehensive being liberalised beginning from July 1 2017 in phase two of the programme. While full detariffication will only come about in 2019, consumers will now have to start paying for their vehicle insurance premiums no longer on a fixed rate basis, but on a risk-based assessment system.

Previously, with tariffs in place, the insurance was determined by fixed price lists, and so an on-the-road price of a vehicle was easily quotable with insurance in place, a method practiced by many automakers and distributors.

What this means is that many factors will come into play in how insurers and Takaful operators determine premiums – for one, pricing is set to differ between insurers. This means that theoretically, no two insurers will have identical pricing for a motor comprehensive policy.

This means that consumers now have to shop around for competitive pricing rates and coverage that best meets their insurance needs, which also changes the dynamic of how pricing of vehicles are viewed.