Without looking into the magic crystal ball, I bet most of you out there buy car insurance in Malaysia out of obligation, one is because you need to renew road tax in order to drive or two, an obligation towards a friend/family/relative who is your agent. You never really figure out what this whole car insurance is all about, and yet you spend thousands of ringgit every year! Do you really need this whole car insurance business? Well, here are 5 basic things you must know about car insurance in Malaysia to get your money’s worth!
Car insurance is compulsory in Malaysia
At the very least, you must buy and renew a third party car insurance on an annual basis in order to get and renew your road tax for your vehicle from Road Transport Department (JPJ) Malaysia. Don’t try to be funny – driving without a valid road tax can cost you penalty in fines up to RM3,000 depending on court’s decision!
There are 3 main types of car insurance in Malaysia
As you know already, the minimum car insurance in Malaysia to buy is a third party car cover, which compensate for any bodily injury and property damage you cause on the other passenger(s) and their car(s). In case anything happens, worse, death or serious injuries caused by your negligence, that results in legal battles and lawsuits, your insurance shall get your sorted.
What about theft or fire explosion happen to your car? Would a third party cover car insurance take care of it? Well, you could cover these risks, by obtaining what we call a third party fire and theft cover, on top on the third party coverage. The coverage amount here is capped by the value of your car at point of insurance, also known as Sum Insured.
Careless drivers like me would unintentionally bring harm to my own car, either through driving in teeny, sempit lanes in Kuala Lumpur, or bracing through traffic jams. What is worse is meeting crazy drivers on the road cutting queues and breaking rules all the time, it is pretty easy to run into an accident or harm your car, even if you try to avoid as much as possible. This is where a comprehensive car insurance coverage would come in handy. You pay extra for additional own damage cover, so that in case you were negligent that you cause some damage to your own car. The coverage amount here is capped by the value of your car at point of insurance.
Of course, as you increase your cover your premiums will increase accordingly.
There are other extra coverages too!
There are other optional coverages that make sense in the car insurance in Malaysia, for instance, gap coverage, roadside assistance (in case your car breaks down and you need the help of a toll truck, natural occurrence (landslide or earthquake occurrences), legal liability to passengers (in case an injury happens to a passenger that is caused by you in your car), windscreen cover (breakage and cracked windscreen) etc can provide a lot of protection for a little price increase. Take a look at your coverage options. Paying a little more now may save you a lot in the future.
One big recommended cover is an extra flood cover to be extended to comprehensive coverage as explained in point 2. We have seen threefolds of increase in flash flood occurrence in the past, and therefore it is worthwhile investment to buy this cover if you live in flood-prone areas, or you are working in a flash-flood prone area like the heart of the Kuala Lumpur city.
To share, AXA offers a limited peril cover that costs RM60-80 on average for 25% of your total car value. Why limited? Well, typically, flash floods would usually cause damage to the bottom half of your car, and the top interiors of your car may be left intact. Therefore, as long as your car is not fully submerged in water, total damage is likely not to exceed 25% of your car value. A limited cover peril could be a good money saving bargain for those who are worried about flash floods!
Many factors can influence your car insurance rate
After the detariffication of Car Insurance in Malaysia, each car insurance company in Malaysia are able to come up with actuarial pricing models and guidelines regarding which groups of drivers they want to accept and how much they will charge those groups they consider a greater risk. The guidelines and assumptions of risks are different for each company, meaning that companies can compare the same driver and arrive at vastly different conclusions.
Factors like age, gender, marital status, previous driving offense, claims behaviour, No Claims Discount (NCD) are taken into account when companies decide the premiums you pay for your car insurance in Malaysia.
AXA currently offers the most competitive rate in the market thus far.
Making a car insurance claim
There are generally 3 simple steps in claiming insurance, and below is an example of own damage claims.
- Guidelines and Documents Checklist
- Send your vehicle to insurance company’s panel repairer for immediate attention.
- Insurance company’s panel repairer will notify them of accident on line, print Claim Form and acknowledgement letter for your completion.
- Return the completed and signed Claim Form to insurance company together with the following documents:
- Original/certified copy of Police Report
- Copy of Policy/Cover Note
- Copy of Vehicle Registration Card / Copy of Vehicle Ownership Certificate
- Copy of your Identity Card and Driving Licence
- Copy of your driver’s Identity Card and Driving Licence (if you were not the driver at the time of accident)
- Copy of the acknowledgement letter duly acknowledged
- Statement from the driver, wherever possible
To find more about the claims process individually, visit the respective websites of the insurance companies for more details!
There you have it! These are 5 basic things you’d need to know about car insurance in Malaysia!
Now you can rest assured that when you’re on the road, you know at least some basic things about your car protection! Now that we have your attention, now for more money saving tips.
PolicyStreet has recently partnered with AXA to launch their motor insurance. It is arguably one of the most affordable car insurance out there right now, and we hear that there is a special limited perils cover (which also includes flood cover) you cannot get from any other insurance companies! Uniquely AXA!