Car insurance premium to rise 40 percent

Tuesday, April 12, 2011
Issue 1282, Page 3
Word count: 536
Published in: Macau Daily Times

By Poyi (Natalie) Leung

Macau’s approximately 200,000 third party car insurance policy holders will be required to pay up to 40 percent more in premiums from June 1 this year.

The Executive Council announced yesterday that the review of mandatory civil liability insurance system for automobiles was complete and that the administrative regulation will come into effect on June 1.

The last time the insurance premium was adjusted was on January 1, 1997.

The spokesperson of the Executive Council Leong Heng Teng said in a press conference that following the continuous development in Macau’s economy and society, it’s necessary to adjust the minimum coverage.

Between 1997 and 2010, the cumulative inflation rate was 21.35 percent, and between 2000 and 2009 the courts had processed 196 car accidents with the highest compensation amount handed down was more than MOP 3 million, Leong told reporters.

According to the proposal, the minimum compensation amount per accident for scooters (with engines no more than 50 cc) will be raised 50 percent to MOP 750,000, while that for motorcycles (over 50 cc) and private light automobiles will also increase 50 percent to MOP 1.5 million.

Taxis and trucks/coaches will see the minimum coverage double to MOP 3 million and MOP 4 million from June respectively.

In addition, Leong said the Government has proposed to impose a ceiling on the amount of compensation per year of this kind of liability insurance from ‘no limit’ to MOP 30 million (MOP 100 million for car racing accidents).

Higher insurance coverage also means higher premiums.

The thousands of third-party insurance holders in the territory may see their premium rise by up to 40 percent.

Following the implementation on June 1, policy holders will be notified by their respective insurance companies within two to three weeks following regarding any discrepancy in premium which will vary from one insurance policy to another.

Customers will also be issued with an updated civil liability insurance card after paying the difference and the insurance association will publish a notice in local newspapers with updated premium adjustments.

Chairman of the General Union of Taxi Drivers, Kuok Leong Shun, told the Macau Daily Times yesterday that the increase in third-party insurance premium will have a ‘minimal impact’ on the local taxi industry.

According to the examples provided by the Executive Council, taxis with engines below 1,650 cc will need to pay 40 percent more in premium costs to MOP 5,132 annually, and coverage will jump one-fold to MOP 3 million.

However, Kuok pointed out that all taxis in Macau are over 2,000 cc as stipulated by the regulations, adding that over 80 percent of the 880 black taxis in the city have been paying about MOP 6,000 in premiums for third-party insurance with a coverage of MOP 5 million “for several years”.

“The claims ruled by the court for car accidents were usually around MOP 2 to MOP 3 million in the past years. It’s a huge amount and so we [taxi drivers] would rather pay more in premiums in order to get higher protection in case an accident occurs,” Kuok said.

The Executive Council completed their discussion about the draft Taxation Code law and will be delivered to the Legislative Assembly at a later time.

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