These are the most common FAQs that would come in handy when you have any doubts regarding car insurance.
Do check them out!
#1 What is meant by motor detariffication?
As you know, starting from 1st July 2017, Bank Negara Malaysia (BNM) has announced that motor insurance will be detariffed. Therefore, insurance companies will be able to implement risk-based pricing and use their own method to calculate insurance premiums for car insurance based on the risk profile of a customer. Hence, the premiums will differ from one policyholder to another policyholder.
#2 Who has the cheapest auto insurance?
You need to know that it is important to compare car insurance quotes as they are determined by numerous factors. Different drivers would have different premiums due to different life circumstances (refer to how car insurance is priced? in the Introduction to Car Insurance for further clarification). You may also be entitled for certain discounts while some drivers may not be. Find best deals here.
#3 What is a risk profile and who will be responsible for determining those risk profiles?
Risk profile is an analysis to determine whether a policyholder shows a high or low risk based on certain factors such as driving record, location and coverage history. Insurance companies are responsible for determining the risk profiles guided by their own identified risk factors.
#4 Is my car covered if someone else drives it?
Your car would be covered if you have included the person’s name in your policy. If the person’s name is not included, then you would have to compensate for the losses. It is always better to include the person’s name who frequently drives your car. It is free for the first two names and RM10 would have to be incurred for the additional drivers.
#5 What is the optional coverage that I can buy under car insurance?
The optional coverage would be the additional extensions that fall under comprehensive coverage. The optional coverage are as follows:
- Windscreen Coverage
- Named Driver
- Special Perils (Flood, Hurricane, Typhoons, Earthquakes, Landslides and other natural disasters)
- Personal Accidents and Medical Benefits for Drivers and Passengers
- Legal liability
- -Legal Liability to Passengers (LLTP)
- -Legal Liability of Passengers (LLOP)
- Compensation for Assessed Repair Times
- Car Accessories Coverage
- Strike, Riot and Civil Commotion
#6 How insurers calculate car insurance or what are the factors affecting my car premium?
As you know, premiums differ from one policyholder to another policyholder. Therefore, you should consider the factors affecting car premiums to understand how your car insurance is priced.
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.
#7 What is excess and how does it affect my premium?
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. The higher the deductibles, the lower the premiums as you have taken more risk on yourself and the insurance company would pay less for your losses.
To clarify, if you have RM1000 deductible and have encountered an accident where you are at fault which have caused RM2000 damage to your vehicle, then you would have to pay the first RM1000 out-of-pocket while your insurance company would bear the remaining losses of RM1000.
Therefore, by being a rational and wise policyholder you should be able to choose the right amount of deductible by comparing how much you would save on your policy each year and how much you would have to fork out money in the event of an accident. You would need to find a perfect equilibrium between your personal budgets and needs.
#8 How do I submit car insurance claims?
When submitting claims, you should directly contact your insurance company. For instance, if you have purchased car insurance from Allianz, then you should submit your claims to Allianz directly for them to review and verify your claim.
If you are a customer from PolicyStreet, you can always contact us if you need any assistance regarding the submission of claims.
#9 Can I renew road tax with PolicyStreet?
Yes, definitely you can! Visit PolicyStreet to renew your road tax with PolicyStreet. Wait no more, renew it now!
#10 How do I cancel my auto insurance policy?
For those who insist on canceling their policy, they should contact PolicyStreet to let them know by messaging them through WhatsApp, calling or dropping an email to them.
If you are a customer from PolicyStreet, you can always contact us by:
Call: +60 3-3310 0063
WhatsApp: +601 11-684 2590
#11 Do auto insurance premiums increase with age?
Your premiums would be the highest when you first start driving due to your inexperience in driving. As time goes on, your premium rates will drop slowly and would be at the lowest between the ages of 30 and 65. You will then see an increase in premium rates.
#12 What happens if I forget to pay my premium?
If you have forgotten to pay your premiums, then your insurance company will mail you a warning letter. If the same problem happens again, then your insurance company would issue a late charge or cancel your policy.
#13 Can I change my coverage whenever I want?
Yes, you may change your coverage whenever you want but you would be charged a cancellation fee. If you insist on waiting until the end of your policy, then you won’t be charged with a penalty.
#14 Will my gender affect my premium rates?
Yes, gender does affect premium rate. Research has shown that male drivers are generally involved in more accidents compared to female drivers. As a result, male drivers would pay higher premiums than female drivers.
# 15 What is meant by No-Claim Discount (NCD)?
No-Claim Discount is known as a reward scheme for you if no claim was made against the policy within the preceding 12 months of the policy.
#16 I am insured under comprehensive car insurance. If I have a four year old car and it was damaged in an accident, will my car be repaired with new spare parts or repaired to a whole brand new car?
No, according to the principle of indemnity your car will be repaired by using the spare parts which is equivalent to a four year old car. The insurance company would compensate your loss by putting you back to the same position you were in immediately before the loss. Hence, principle of indemnity is crucial in insurance.
If your vehicle is more than five years old, then the principle of betterment can be applied. Betterment happens when in the course of repairing an accident-damaged vehicle, an old part is replaced with a new franchise part. Following the principle of indemnity, you will need to bear the difference in costs as you are in a better position after the accident with the new franchise part. If your insurance company applies betterment, then it would be accordance with the standard scale of betterment adopted by the industry as follow:
|Age of vehicles/Years||Maximum Rate (%)|
|Less than 5 years||0|
|10 and above||40|
#17 How do I know if I am getting a fair deal?
You can visit PolicyStreet. From there, you would be able to key in the relevant details and generate instant quotes by doing comparison from the top insurance companies provided in Malaysia. Try it now!
Take a look on the diagram below on our top insurers:
#18 What happens if I don’t get car insurance?
If you are not insured and get into a car accident, then you would be sued, losing your life’s savings and getting jailed. You might want to avoid this, get insured now under PolicyStreet!
#19 Will car insurance companies share my information with each other?
Yes, car insurance companies will share your insurance claims history with the other insurance companies as well.
#20 Do I need to adhere to the duty of disclosure?
Yes, according to the duty of disclosure, you would need to disclose fully all material facts including previous accidents (if any), modifications to the engine etc. It is better to ask your insurance company when you are in doubt whether a fact is relevant or not.
If you have failed to disclose any material facts, then your insurance company may refuse to compensate your claims or any claim made by a third party againsts you. If that happens, then you would be personally liable for the losses incurred.
#21 Will my premiums be higher if my car is red-coloured?
Definitely no! This is known as a myth. Driving a red-coloured vehicle does not make your insurance premiums higher than the other coloured cars. In fact, insurers will not ask you for the colour of your car when requesting for quotations.
Great job, you have now reached the end of the page. Hope that you are able to clear your doubts regarding car insurance by going through these FAQs. Visit www.policystreet.com for further information and do drop an email or call us if you need any further clarification regarding it.