Some insurance contracts are guaranteed renewable. The insurance company has to renew the policy based on its standard rates. The insurance company cannot refuse to renew the insurance, or to charge a higher rate based on the claim record of the individual person. (However, the insurance company can revised its standard rates based on its claims experience, but the same rate must apply to the whole class of policyholders).
This feature is standard for long term health insurance. It is a standard feature of the Medishield or the private Shield in Singapore. I hope that the guaranteed renewable feature can be extended to motor insurance.
At present a motorists may find that after a large accident claim, their insurance premium may be loaded by 50% to 100%, in addition to losing their no-claim bonus. They have to accept these harsh terms, as no other insurance company may accept them. They may suffer this penalty even if they have many years of accident free record.
At present, no insurance company offers this guaranteed renewable feature, even for motorists with good driving records. If you find an insurance company that does offers this feature in the future, it is better to insure with this insurance company even if the premium rate is 10% higher.
Tan Kin Lian
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