YOUR correspondent Michael Lambert (South China Morning Post, July 27) asks why his third party motor insurance cover has increased so much since 1991 and, further, why his insurance company now wants him to purchase a homeowner's cover to support the motor third party insurance.
The questions are probably better addressed to the specific insurance company, but I can say that, since 1991, third party insurance premiums, as recommended by the Accident Insurance Association, have been $1,900 (1991) and $2,100 (1992 and 1993).
These are subject to no claims discount which can reduce them further, but it can be seen from this that the correspondent's premiums as quoted ($529 in 1991 and $1,200 in 1993) compare favourably.
It is well known that motor insurers have not had an easy time of it in the past few years.
Accordingly, it could be that in placing a 1985 Honda Civic with a third party premium of only $1,000 or so, some insurers may require supporting business in order to cover the relatively high administrative costs associated with a policy attracting sucha low premium.
However, it is not believed that this practice is widespread and it is certainly not condoned by the Accident Insurance Association of Hong Kong.