There are instances where
Takaful operator will charge say RM2,000 for motor takaful coverage while a
conventional insurance company
may only charge RM1,000
for similar vehicle. To the consumer,
this is considered “zalim” or unfair as Takaful is charging much higher than
the conventional insurer. What is your
comment?
Takaful company is operating as a commercial entity
similar to any other business entities.
Thus, Takaful is operating in a competitive business environment where
all entities are striving to offer the best to their potential customers. There are many strategies used by respective
entity to attract their customers which sometimes misled the customers. In insurance and takaful, the basis of
deriving the contribution rate is almost similar for all companies. Differences may arise when there are
different benefits, exclusions, terms and conditions as well as services
rendered. In fact, there are many
factors in determining the rate of a motor takaful or insurance. Below are few of the key factors taken into
consideration in determining the motor takaful rate:
1.
Type of vehicle
2.
Type of coverage
required
3.
Area of coverage
4.
Sum covered
5.
Engine capacity
6.
No Claim Discount
(NCD)
7.
Excess
8.
Any additional
benefit required
a.
Windscreen cover
b.
Flood cover
c.
Car accessories
cover
d.
Passenger liability
cover
e.
Legal liability for
passengers act of negligence
f.
Strike, Riot &
civil commotion
Different company may impose different loading for
each item which will lead to different final gross contribution or
premium. Consumer must understand the
complete benefits offered by the company before accepting the quotation. Thus, the comparison between takaful
contribution and conventional insurance premium can only be dealt with provided
that the full details ingredient of the
quotation available. There are instances where the provider allows to cover
below market value of the vehicle. Consequently
the premium is lower but this practice may result in average clause penalty
during claims where the claims payable is discounted based on the proportion
between sum covered and the market value.
However, Takaful is operating in a different
business model compared to conventional insurance company. For a Muslim, he must ensure that he
understands the business model very well to validate his transaction free from
Gharar, Maisir and Riba. The money he
pays under Takaful is a contribution into a donation fund based on
at-Tabarru’at and has no similarity whatsoever to the money paid under
insurance contract known as premium.
Therefore, both contribution and premium are not comparable even though
they are similar. It is like giving to a
needy voluntarily to buy a cloth and buying the cloth for yourself. When you have agreed to voluntarily give some
money to a needy to purchase a cloth you are in no circumstances will complaint
whether the money you gave is high or not as you have fully agreed to donate
the amount. On the other hand, when you
purchase the cloth for yourself, you definitely will explore the best possible
offer available in the market. In other
words, you may consider your purchase as expensive or not after comparison with
other sales. As such, the money you
voluntarily given to the needy is similar to takaful contribution where you
willingly contribute to the takaful fund and the money you used to purchase the
cloth is similar to the insurance premiums.
Now, you should be able to understand the key reason as why takaful
contribution is not comparable to insurance premium. Based on the same analogy, the money is
called contribution in takaful instead of premiums as practised in insurance
industry.
