Table of Contents
- What is car insurance?
- How does car insurance work?
- Why is car insurance important to you?
- How to purchase car insurance and who are the providers?
- How car insurance is priced?
- 5 Ways to lower car insurance costs
- What should you consider before purchasing a car insurance?
- What should you do in the event of a car accident?
What is car insurance?
Car insurance is known as a policy contract which is signed between the policyholder and the insurance company. The main purpose of a car insurance is to protect the policyholder against financial losses caused by road accidents, fire or theft in exchange for annual premium payments.
In Malaysia, as a car owner it is mandatory to own a car insurance because no matter how skilled you are, numerous unpredictable incidents could happen on the road which are beyond your control. Take a look at the graph below:
The number of road accidents has been increasing year on year from 2012 to 2018. In the year of 2018 alone, 548,600 accidents have occured in Malaysia. Hence, it is unwise to think that you do not require car insurance as it offers protection against any potential unforeseen losses.
How does car insurance work?
In Malaysia, all of the car insurance companies offer three basic types of car insurance coverages which consists of:
- Third Party Coverage
- Third Party, Fire and Theft Coverage
- Comprehensive Coverage.
Before you pick any of them, here are the comparisons on what is covered under the three main coverages:
| Comprehensive Cover | Third Party, Fire and Theft | Third Party | |
|---|---|---|---|
| Death or injury to Other Parties | Yes | Yes | Yes |
| Damage to Other Parties’ Properties | Yes | Yes | Yes |
| Loss or damage to own vehicle caused by Fire or Theft | Yes | Yes | No |
| Damage to own vehicle due to an accident | Yes | No | No |
Policyholders should be aware of the types of losses that are covered under the three main coverages before purchasing an auto insurance.
Third party coverage (First coverage) is known as the most commonly purchased coverage among these three coverages. This coverage insures the third party who is involved in any car accident. To clarify, if the policyholder is at fault in an accident, this policy would bear the cost of the third party’s car damages and bodily injuries.
Whereas, third party, fire and theft coverage (Second coverage) consists of the coverage covered under the third party coverage. Also, it provides additional coverage for the policyholder’s car caused by the event of fire or when the car is stolen.
Comprehensive coverage (Third coverage) consists of the following coverages mentioned above and also, it provides additional coverage for the policyholders’ cars that are damaged due to the occurrence of an accident. This coverage is also known as the most diverse and widest coverage compared to the other coverages.
Why is car insurance important to you?
Car insurance offers a wide array of benefits to the driver. Car insurance does not only protect the driver against car accidents but it also protects the driver against financial liability, legal consequences and medical expenses.
Car insurance is significant as it provides financial protection to the drivers against any unforeseen losses. For instance, if a car insurance is not purchased by the driver, the driver has to fork out a huge amount of money to bear the cost of incurring car damages and bodily injuries.
Besides that, drivers should also bear in mind that driving without a car insurance could result in fines and license suspension. This is because motor insurance and road tax play a significant role together.
Drivers would not be able to apply for road tax without owning a car insurance policy for their vehicle under the Road Transport Department (JPJ) Malaysia. If the drivers failed to do so and were caught driving, they would be imposed a penalty of RM3,000 under Section 14(4) of the Road Transport Act (RTA) 1987.
How to purchase car insurance and who is the provider?
Purchasing car insurance has never been easier with just a few clicks. Rather than the traditional method, people can now purchase car insurance via the online platform as it is simpler and cheaper compared to what the agent is trying to sell to you.
Now that you have decided to get yourself covered, the next question is which car insurance you should choose? Luckily, PolicyStreet offers a car insurance platform where you can compare and buy directly from there! As Policystreet is a financial advisor approved by Bank Negara Malaysia (BNM), you will be able to find a variety of car insurance with unbiased choices and the pricing that suits your needs!
Here are the steps on how you can purchase car insurance via PolicyStreet:
- Visit policystreet.com/motor/
- Key in the relevant details and generate instant quotes
- Choose the type of insurance that you are purchasing
- Add on extra coverages that you prefer
- Give us your details and Check out!
As simple as buying from Lazada, you buy and we will deliver. Get yourself covered within 5 minutes only!
In case you are wondering what are the varieties of car insurance providers we have in our platform, here is a list:
- AXA Affin – AXA SmartDrive and AXA FlexiDrive Car Insurance
- Allianz General – Motor Comprehensive
- Tokio Marine – Tokio Now Car Insurance
- Etiqa – MyEtiqa Car Insurance & Takaful
- MSIG – Car Insurance
- Sompo – Motor Insurance
- Zurich – Car Insurance
- Motor Insurance & Takaful
How car insurance is priced?
Have you ever wondered how car insurance is priced and why the premiums of the policy differs from one policyholder to another policyholder?
Below are the main requirements that insurers would look up to when charging premium to a policyholder:
Driving record: Drivers that have a safe driving record would be charged with less premiums compared to those who are prone to cause accidents.
Location: Drivers who are living in areas that have high crime rates and larger populations would be charged with higher premiums compared to those who live in a low crime rate area.
Coverage history: If the driver has continuous auto insurance coverage which shows that the driver is a responsible car owner, then a lower premium would be charged compared to those who have a bad record.
Vehicle: Cars that have safety features and lower market value would cause the premiums to be lower than cars without these requirements.
How much you drive?: If the driver spends less time driving, then the driver would have a lower chance of getting into an accident and therefore, the premiums would be much lower compared to those who spend more time driving.
In brief, all of these requirements will be taken into consideration by the insurers when charging premiums to a policyholder.
5 Ways to lower car insurance costs
Most of you would be wondering what are the ways to lower your car insurance costs. Well, take a look below to know more about it!
#1 Shop around
As a rational policyholder, you should compare the prices carefully as the prices vary from one company to another company. By comparing the quotes through PolicyStreet, you are able to get the best deal! Do remember that, it is important to opt for an insurance company that is financially stable. Also, you should get some recommendations from your friends or relatives to provide some suggestions that might be helpful to you.
#2 Ask for higher deductibles
Deductibles which are also known as excess is the amount of money that you would have to incur while the remaining amount would be borne by the insurance company. By requesting for higher deductibles, you can cut down on your costs. But before considering this strategy, you should make sure that you have sufficient money set aside to pay for the claims.
#3 Maintain a good credit record
You need to be aware that most insurers use credit information to price car insurance policies. Therefore, by establishing a solid credit history, you can cut down your insurance costs. Research has also shown that policyholders who effectively manage their credits would have fewer claims to be made. In order to have a good track of your credit record, make sure you pay the bills on time, do not obtain more credit than you need and keep your credit balances as low as possible. A consistent checking on your credit record is significant to avoid any errors and to make sure that your credit records are accurate.
#4 Seek out other discounts
Insurance companies often offer discounts to policyholders who have not had any accidents over the years. For instance, young drivers who are good students and have taken driver’s education courses may be qualified for a lower rate. In order to receive discounts from insurance companies, you should make sure that you have met the requirements set by your insurance company.
#5 Buy from the same insurer
Most of the insurance companies would lower your costs if you purchase two or more types of insurance. You may also get a reduction if you have more than one vehicle insured from the same insurance company. Also, some insurers would reduce the rates for loyal and long-term customers. You may save money from different insurance companies compared with the multi policy discounts.
What should you consider before purchasing a car insurance?
Have you ever wondered what are the requirements that should be taken into account before purchasing a car insurance?
Brand Reputation
The brand reputation of an insurance company is pivotal and should be considered by customers when purchasing a car insurance policy. You should opt for car insurance companies that have a good reputation in the market. This is because companies that have a good reputation in the market would have a higher probability of delivering their promises compared to car insurance companies that are lesser-known in the market.
Coverages
You should also do some research regarding the coverages as they differ depending on the type of plans and vary across providers. Therefore, you have to be rational in choosing the best coverage which meets your needs and preferences.
Discounts
You can enjoy certain discounts which helps you to minimize your premiums when buying insurance through the online platform. Therefore, before considering purchasing an insurance, you should check on the discounts that are available which helps to lower your premiums. For instance, customers are able to enjoy discounts if they have installed anti-theft devices in their car. From here, it clearly shows that a lot of research has to be done by customers regarding the discounts that are available before purchasing a car insurance.
What should you do in the event of a car accident?
Have you ever wondered what steps should be carried out when you have encountered a car accident? Kindly, follow the steps in order to make sure your claim is successful.
- Take note of the accident – If you are involved in a car accident, kindly take note of the names and addresses of all the drivers and passengers who were involved in this accident, vehicle registration numbers, model of each vehicles involved, drivers’ license numbers and insurance identification as well as the names and addresses of as many witnesses as possible.
- Lodge a police report– By law, you are required to lodge a police report within 24 hours of the occurrence of the car accident.
- Notify your insurance company– You must inform your insurance company with full and complete details of the car accident in order to make a claim. Inaccurate details of the accident would not be entertained. If you failed to report regarding the accident, you would be responsible for your own losses as well as third party’s losses.
- Select the workshop– Kindly take note that your damaged vehicle should be sent to a workshop which is approved by your insurance company. If the accident occurs during working hours, then you may call the hotline or the emergency assistance numbers provided by your respective insurance companies. Alternatively, you may call your respective insurance company for the nearest approved workshop. If the accident occurs outside working hours, you should make sure your vehicle is towed to a workshop approved by Persatuan Insuran Am Malaysia (PIAM) [also called PIAM Approved Repairers Scheme (PARS)]. If you are making a third party claim, it is recommended that you send your vehicle to a workshop which is approved by PARS.
To sum up, you should not regret purchasing a car insurance as it provides numerous benefits. It is the power that protects you. Get insured now under PolicyStreet!
What else do you need to consider under car insurance?
Can a car insurance company drop you?
As you know car insurance is a contract and contracts can be cancelled or voided by either party. You can also drop the contract by opting to change to another company. The following are the reasons in which an insurance company can drop you:
- If you have failed to pay your premiums
- If your license is suspended or revoked for any reason such as too many accidents incurred
- If you submit fraudulent information on your application for the coverages
Can a car insurance reject your claim?
You should always present accurate information in order to make sure your claims are successful. If you meet any of the following conditions below, then your claim would be deemed as unsuccessful.
- Presenting a fraudulent claim where you have exaggerated the accident or the loss
- Filing a claim under a coverage that you are not in
- Filing a claim for a loss that is not covered in your policy
- Making improvements to your vehicle such as getting a fancy paint for your vehicle without prior notification to your insurer. The insurer would then reject your claim or compensate on the original value of the vehicle.
- If you have missed out your periodic premium payment. You may have your coverage suspended until you catch up your premium payments. If you insist on filing a claim while your insurance is suspended, your claim would be revoked.
Conclusion
Congratulations, you have now mastered the basics of car insurance! Purchasing car insurance provides numerous benefits. It is the power that protects you! Get insured now under PolicyStreet!
Stay tuned on our next articles to get updated with the latest news and information.
