[Commercialization of RVs] Insurance Mechanism Still Unclear, Industry Players Still at a Loss

(Kuala Lumpur, 15th) Although the government has allowed recreational vehicles (RVs) to be registered for commercial use starting this year, and permitted their use for self-drive rental services, industry players pointed out that related implementation details and insurance mechanisms are still unclear, leaving them at a complete loss.

Dato’ Low Hui Teck, President of the Malaysia Recreational Vehicle Association, pointed out that industry players currently only know they can apply for a commercial license through a single-window mechanism, but the application process and supporting measures have yet to be announced, especially regarding insurance arrangements, for which no details have been provided so far.

In an exclusive interview with Bernama, he said that insurance companies have never dealt with such business before, so industry players and insurance companies can only negotiate suitable premiums on their own.

According to his understanding, RV insurance currently follows that of regular private vehicles, but once switched to commercial use, as per the current practice of car rental companies, commercial vehicle insurance premiums are usually two to three times higher than those for private use.

"We cannot accept this arrangement because RVs are not rented out year-round."

In view of this, and with experience in self-driving RVs in several countries, he proposed a compromise solution: offering insurance packages based on the actual number of rental days.

"When a customer wants to rent, only then do we purchase the corresponding insurance package—this is how it’s done worldwide. If the RV isn’t being rented out, we’d only pay the lowest premium, that is, the basic third-party coverage. This is our suggestion to insurance companies."

Low Hui Teck revealed that he has approached several insurance companies to discuss relevant packages, but so far, not a single company has launched a comprehensive insurance mechanism suitable for self-drive RV rentals.

With RVs now permitted to be registered for commercial use and for self-drive rental this year, industry players point out that due to factors such as vehicle age restrictions and increased costs, rental fees may be raised, making truly affordable RV self-driving tourism still a challenge.

Low Hui Teck pointed out that currently, the daily rental for a 20-year-old RV is about RM600; with an age limit set at 15 years for registration, the procurement cost for compliant RVs is already higher. Adding on periodic inspections and insurance premiums yet to be decided, future rental prices are bound to rise, estimated at up to RM1,000 per day.

In the interview, he said that to boost market viability, the government could consider relaxing the commercial registration vehicle age limit to 20 years; as long as the vehicle is properly maintained, a 20-year-old RV is still serviceable.

"Secondly, government departments could formally notify insurance companies so they can provide packages as agreed with industry players—insurance companies should comply. Simply letting industry players negotiate directly has limited effect, as insurers are more concerned about potential annual premium volume from operators."

For RVs registered before December 31 last year, owners can also convert them to commercial use, on the condition that the vehicle does not exceed 15 years old, and passes the technical inspection and approval set by the Road Transport Department.

Apart from rental cost issues, Low Hui Teck pointed out that Malaysia still has much room for improvement in RV campsite development.

He said that as a tropical country, Malaysia is not subject to seasonal constraints and has the potential for developing RV tourism, but overall campsite infrastructure may still take 5–6 years to gradually improve.

He gave examples that some seaside campsites face sandfly issues, while highland campsites located near vegetable farms suffer from fly infestations, indicating the need for better overall environments.

He pointed out that Malaysia also lacks experts with RV campsite design experience. Some campsites developed by municipal councils were designed by individuals unfamiliar with the actual power, water, and space demands of RVs, lacked thorough site investigation, and did not communicate with stakeholders, resulting in some campsite projects turning out suboptimal.

However, he believes that Malacca Historic City Council (MBMB)’s RV campsite at Bukit Serindit in the city has the most complete facilities and could serve as a model.

He also shared his observations on foreign campsite development, taking the UK as an example, where some RV campgrounds are set on farms or unused grassy lots adjacent to large outdoor restaurants or cafés.