THE terms and conditions of a standard motor insurance policy state that private vehicles are not insured if used for hire or reward.
If any of the 20 general insurance companies in Malaysia provide such insurance coverage, it should make the information known publicly.
Since 2014, I have been waiting for such coverage, as it is too risky to drive for Uber or Grab with my private car insurance.
It was also against the law until amendments to the Land Public Transport Act 2010 and the Commercial Vehicles Licensing Board Act 1987 were passed in Parliament on July 27. But other risks remain.
I will not be able to make an “Own Damage” claim should my car be involved in a collision when ferrying fare-paying passengers, unless I lie to my insurance company that I was driving alone.
More importantly, my motor insurance does not cover third-party injuries, which is required by law for motor vehicles.
The law protects injured victims, who will have to sue drivers at fault and wait for the court to award compensation, which will then be paid out by the insurance company.
However, insurance companies will repudiate cover if any of the terms and conditions of the motor policy is breached.
In such situations, drivers will have to pay out compensation, but few would have the money or assets to settle a huge claim.
Another matter that worries me is my liability to passengers. For public service vehicles, drivers are covered for legal liability to passengers, which is automatically included in motor policies for taxis.
This cover is also required by law so that injured passengers may sue the taxi driver at fault, similar to insurance cover for third-party injuries.
When two vehicles collide, passengers may have to sue both drivers, as a taxi driver is insured for legal liability to passengers and the other motorist covered for third-party injuries.
Should the judge find the taxi driver to be mainly at fault and the other motorist less so, the insurance company for the taxi may have to pay 70 per cent of the compensation, and the balance by the insurer of the other vehicle.
The annual premium for legal liability to passengers for private vehicles is low, at only 25 per cent of the premium for third-party cover.
Although I could arrange for it, it does not cover fare-paying passengers.
Personal accident insurance (PAI) covers are generally superior to legal liability to passengers if the sum insured and medical expenses cover are adequate.
This is because PAI claims are paid out speedily, without having to establish fault, whereas compensations for third-party or legal liability claims usually take several years to settle.
As amendments to laws take time, it would be better for insurance companies to offer new motor insurance policies to cover private vehicles used for e-hailing service, including legal liability to passengers.
A fair rate would be between RM26 per thousand ringgit sum insured for private vehicles to RM69.80 for taxis. An unreasonable rate would be between RM102.50 per thousand sum insured for limousine taxis to RM122.10 for hire-and-drive vehicles.
Detariffication of the Motor Tariff started on July 1 last year, but the silence from both insurance companies and the General Insurance Association of Malaysia is deafening.
Motor insurance for private vehicles used for e-hailing service should be introduced and made clear to protect drivers, passengers and other road users.
This will allow interested parties to apply for the intermediation business licence needed to provide passenger transport service using private vehicles through e-hailing apps.
Y.S. CHAN
Kuala Lumpur