Wednesday, February 5, 2014

Why Banks Reject My Loan?

Banks do not always inform you of the reasons behind the rejection of your loan application.  (may be due to BAFIA)

You may have charted out a rudimentary business plan and fulfilled all the basic economic, financial and social requirements but the bank still sees something lacking. Stop losing sleep over why your loan application gets rejected, contact us.

Monday, February 3, 2014

Motor Insurance 101 - Know the exclusions!

 A standard motor insurance policy does not cover:
  • Your own death or bodily injury;
  • Your liability against claims from your passengers;
  • Theft of non-factory fitted vehicle accessories (car stereos, leather seats, sports rims etc) unless otherwise declared.
  • Consequential loss, depreciation, wear and tear, mechanical or technical breakdown failures or breakages; and
  • Loss/damage arising from an act of nature, e.g. flood, landslide, storm.

Luckily, for additional premium, some of these exclusions may be covered.

  1. Windscreen (Endorsement 89)
  2. Legal Liability For Passengers
  3. Special Peril (Endorsement 57)
  4. Vehicle Accessories (Endorsement 97) 
Since your own bodily injury is not covered, don't forget to buy Personal Accident for yourself.

Motor Insurance 101 - What is ISM-ABI?

Have you wonder why the insurance agent asking you to insure your car more than the price you pay for it?

It is always no problem when nothing happens but when claim arises, consumers always complaint they were cheated or underpaid.

Let's look at the news published in November 2009.

Insurers to adopt new vehicle valuation system
7 November 2009, By Business Times
Insures and takaful operators have agreed to incorporate into their motor insurance policy a reference point to determine the market value of vehicles. Last month, both Bank Negara Malaysia and the General Insurance Association of Malaysia (Piam) endorsed Insurance Services Malaysia's Automotive Business Intelligence system (ISM-ABI). The ISM-ABI is the only approved system for vehicle valuation among financial services companies in Malaysia.

"The introduction of the new system for motor insurance is in line with practices in other developed markets," said ISM chief executive officer Carl Rajendram in Petaling Jaya yesterday. Rajendram said that most major motor insurers and takaful operators are in the process of adopting the new and more transparent system for motor insurance starting 2010. "It is part of the modernisation of Malaysia's motor insurance and takaful cover announced recently and will ultimately benefit the consumers, insurance and takaful companies," Rajendram said. "The entire automotive industry is moving towards greater competitiveness and efficiency and we are confident that the ISM-ABI will play a pivotal role in driving this objective among all stakeholders," he explained. With the new service from ISM, insurance and takaful companies now have the ability to generate renewal notices with the current year sum insured with the corresponding premium to be paid. "The services increase transparency in the whole motor insurance process not only for purchasing insurance but also during claims," Rajendram said.

With the new system from ISM, insurers and takaful operators may also choose to pre-determine the compensation upon theft and total loss claims by referencing the database. "Consumers are also able to verify the vehicle's market value themselves from the website and access the same information that insurers are accessing," he said. The new service will reduce uncertainty when insuring a vehicle and reduce dissatisfaction that consumers experience when making a claim.

Travel insurance saved my mum ~ True Story

29 September 2010, By The Star

        RECENTLY, on a trip to China with my 81 year-old mother and some friends, we met with an accident. My mom and I were knocked down by a car. My mom suffered head injuries when she fell and hit her head on the pavement. We took her to the hospital where it was determined that she was bleeding in her brain and would be in no condition to travel. Beside difficulties in communicating with the locals as their dialect was different from the Mandarin that we used in Malaysia, I also found out that it was going to cost a lot of money to treat my mother.
Furthermore, the Chinese hospital would only accept yuan. Since I did not have much yuan with me, I was quite desperate. Then I remembered the travel insurance I bought for the trip and called the emergency number given. After confirming everything was in order, the customer service staff arranged for doctors from Malaysia and Beijing to liaise with the attending doctors at the hospital and to advise and keep me informed. I was asked by the company’s doctors whether I wanted to bring my mother home to Malaysia. I told them that I did not see how it was possible due to my mother’s condition. They assured me that they would make the arrangement and a plane would be sent over to pick us up. The plane duly arrived as promised. I was surprised that the plane had ICU facilities with a doctor and nurse on board.
On arrival in Kuala Lumpur, there was an ambulance waiting to take us to the hospital requested by me earlier. I was really amazed that for the small premium that I paid, we were given such VVIP treatment. As a businesswoman, I was impressed by the professional manner of their staff in looking after us. With more Malaysians now travelling, they should not neglect buying travel insurance from the right company, especially when traveling overseas. They should also know what insurance coverage they are getting. I would like to thank all the staff who looked after us in China and Malaysia, especially Dr Alan, Dr Teoh, Dr Grey, Ms Sharmini and Ms Lisa. YVONNE YUE, Kuala Lumpur.

Motor Insurance 101 - Why premium going up soon?

According to PIAM website, current motor insurance tariff has not changed since 1978, wow, that is about 36 years already...

Therefore, beside Petrol, Sugar, Electric Tariff, Food, motor insurance tariff will be increased soon by way of de-tariffication, because currently it is a loss making business for most insurers.

Key factors affecting the deteriorating results of the motor insurance sector are:-
  1. Inflation of spare parts prices, repair costs, legal fees, adjustors' fees, cost of claims administration, etc.
  2. Escalating court awards e.g. the highest court award was for RM9.8million.
  3. Vehicle thefts - the total number of stolen vehicles has increased significantly from 8,869 cases in 1997 to 40,284 cases in 2009 i.e. up 4.5 times over 13 years whilst the quantum of claims escalated from RM135million to RM606million in 2009, up 4.5 times in the same 13-year period.
  4. Fraudulent claims. These are fabricated or inflated claims perpetrated by syndicates or various parties to insurance claims or even ordinary law-abiding citizens who take opportunity to defraud insurers. Based on a study, bogus and inflated insurance claims cost the UK insurance industry over £1.6 billion a year and this would have added 5% to every policyholder's premium. When translated to the local scenario, the same 5% for insurance fraud will cost an additional RM650 million in premium payments by policyholders in Malaysia.
  5. Risk Based Capital Framework requires that each insurer maintain a capital adequacy level that commensurate with their risk profiles and was implemented from Jan 2009. Insurers are generally required to provide for additional capital or risk charges for their business risks. Inadequacies in premium ratings must be supported by higher capital requirements and this is the scenario that many motor underwriters are experiencing in the light of the deteriorating motor insurance results.

Motor Insurance 101 - What is Special Peril?

Usually, car owners want to keep the premium as low as possible. Therefore, they tend to ignore the benefit (additional coverage) which requires 'additional premium'.

Special Peril is one of the additional coverage most car owner do not aware (yet).... basically it covers the act of nature, e.g. floods, typhoons, tsunamis, hurricanes, storms, volcanic eruptions, earthquakes, landslides, landslips, subsidences or sinkholes, earth or other convulsions of nature.

In 2012, statistic from PIAM showed only 0.4% of the motor policy took on the Special Peril cover.

Many car owners only aware that their have to bear the loss when car damaged by flood or storm, which can be a big hit to their financial, just like what has happened recently in East Coast in year 2013.

How much is the 'additional premium'?

It costs 0.5% of the Sum Assured. If your car's market value is RM40,000 then the premium (NCD not applicable) is RM200 only.