Insurers refuse to cover old cars, young drivers

Insurance firms tend to decline coverage to cars, motorcycles or scooters older than 15 years and to owners below 25 years or with less than two years of driving experience

Insurance coverage is mandatory for all vehicles in circulation but local insurers often refuse to take on coverage for old cars and young or inexperienced drivers, the Consumer Council (CC) warned.
In the latest issue of its Consumer Report, the council published the results of a survey carried out among 11 insurance companies. Of the six insurers that did reply, all admitted to refusing coverage to some applicants.
The data shows that the most important factors that draw a company to this decision are the age of the vehicle and the owner, the driver’s experience and history of serious accidents.
All six insurance firms said they tend to decline coverage to cars, motorcycles or scooters older than 15 years and to owners below 25 years or with less than two years of driving experience. The industry is also wary of taking on drivers who were involved “in cases of reckless or dangerous driving”.
In addition, all but one of the companies routinely reject insuring some types of car models. For instance three insurers openly admitted that they “don’t usually grant coverage to sports cars”.
And even if the firms agree to the contract, the amount deductible in case of accident for these sports cars is higher than for other vehicles. In some cases the owners might have to pay up to MOP 68,000.
The insurers also admitted to taking into account the driver’s job while determining the coverage fees. But only one gave any details, stressing it singled out casino workers.
The survey shows that the different companies have different policies on setting the excess deductible in case of accident, “therefore the amount deductible can vary a lot,” the CC warned.
The average amount mentioned by the several insurers was as little as MOP 1,000 and as high as MOP 15,000.

More accidents

Macau law states that cars, motorcycles and scooters are only allowed to circulate as long as they have signed up to civil liability insurance on the damage caused by any accidents.
If at least three insurers refuse to provide coverage to a driver, he or she can ask for help from the local financial regulator. The Monetary Authority (AMCM) will then set the conditions for a co-insurance contract and choose an insurance company.
This firm has to accept this contract or else it could be banned from signing any car insurance deals for a period ranging from six months to three years.
In case of an accident, under the co-insurance system, the several companies that were included in the co-insurance will pay the compensation.
Macau Daily Times has contacted AMCM to ask if any such case had been reported in the territory but received no reply.
At the end of last November there were almost 206,000 vehicles in circulation in the territory. Most (about 111,000) were motorcycles or scooters while more than 88,000 were light-motor cars and nearly 6,600 were trucks or buses.
During the January-November period of 2011 the number of traffic accidents grew by 7.7 percent year-on-year to just short of 12,900, according to official figures from the Public Security Police, quoted by Portuguese-language Tribuna de Macau.
The number of slightly injured also rose slightly to reach 4,800. There were 10 fatalities from car accidents, one more than in the same period of 2010.