Thursday, September 4, 2014

Motor Insurance 101 ~ What is Endorsement 113?

When you received your Motor Insurance Policy for your car, have you wonder what are all the numbers means?

Example of some common endorsement are 2F, 106, 89, 15, and 113.

So, why this endorsement is important? When nothing happens nothing happens, when claim arises then this "code" became relevant.

ENDORSEMENT 113 - REFERENCE TO MOTOR VEHICLE MARKET VALUATION SYSTEM

It is agreed that even if anything stated to the contrary in this Policy, clause (d), (e) and (f) under the header 2. Basis of Settlement of Section A of the Policy is deleted and replaced with the following clause (d), (e) and (f) :-
(d) When a claim is made, the market value of Your Vehicle would be determined by the *ISM Automobile Business Intelligence System and this value would be equal to the cost of purchasing a replacement vehicle of the same make, model and age of Your Vehicle at the time of loss.
(e) If no market value is available from the * ISM Automobile Business Intelligence System for Your Vehicle, the market value of the vehicle would be determined by a Loss Adjuster licensed under the Insurance Act, 1996, agreed to by both You and Us.
(f) The valuation done by the *ISM Automobile Business Intelligence System or Loss Adjuster licensed under the Insurance Act, 1996 will be conclusive evidence in respect of the market value of Your Vehicle in any legal proceedings against Us.
Subject otherwise to the Terms of this Policy.

*Insert ISM Automobile Business Intelligence System or any other motor vehicle market valuation system(s) that may be approved by PIAM and Bank Negara Malaysia.

Notes:
1. Reference to the ISM Automobile Business Intelligence System or any other motor vehicle market valuation system (s) as approved by PIAM and Bank Negara Malaysia should be used by the insurer to determine the sum insured at the point of purchase/renewal of the motor insurance policy as well as
the quantum of settlement when processing claims, and not only in the event of a dispute.
2. Insurers is required to choose only one particular market valuation system as a reference point to determine the market value of a vehicle from the inception of the policy i.e at the point of purchase/renewal of the motor insurance policy to claims processing (quantum of settlement).
3. The sum insured value prescribed should be the recommended sum insured of the insurers and not to be applied as agreed value basis (unless specifically mentioned by the individual insurer).
4. The recommended sum insured at all time shall be the same as the value prescribed by the chosen valuation system.
5. Basis of Settlement 2(c) - Average clause is not applicable if insured adopts the insurer's recommended sum insured based on the chosen valuation system.