When you’re out on the road, you can never be too prepared for what happens, especially when you’re driving your vehicle. Extreme weather conditions, unruly fellow drivers, errant motorists, careless pedestrians or even a stray animal can cause an accident.
Although you’re truly worried about everyone who’s involved in the accident, a part of you would also be worried about the state of your car. When you meet with an accident, your first instinct should be to inform your motor insurance company.
To receive any compensation for damages resulting from the accident, it’s important that you make the right kind of claim – an own damage claim or a third-party claim. Here’s where it can get tricky. Without proper knowledge about what a motor insurance claim is and how you can register it, the chances of you receiving adequate compensation is low.
Read on to find out all that you need to know about motor insurance claims – a third-party claim in particular.
What is Motor Insurance?
Motor vehicle or auto insurance provides you with financial cover for loss or damage sustained by your car because of natural or man-made reasons. According to the Road Transport Act 1987, all vehicles plying on public roads in Malaysia should be insured.
There are three main types of motor insurance cover that you should know of:
- Third-party insurance: Covers you against third-party claims for physical injuries, death and in case of loss or damage of third-party property.
- Third-party, fire and theft insurance: Covers you against claims for third-party physical injuries, death, loss or damage of third-party property as well as loss or damage to your vehicle because of fire or theft.
- Comprehensive insurance: Besides covering you against claims for third-party physical injuries, death and loss or damage of third-party property, it also provides coverage in case of loss or damage to your vehicle because of an accident, fire or theft.
Types of Motor Insurance Claims
There are two main types of motor insurance claims in Malaysia:
- Own damage claim: You can make an own damage claim only if you have a comprehensive motor insurance policy. This claim is made against your own insurance cover.
- Third-party claim: There are two ways how most accidents play out – when it’s your fault and when it’s the other person’s fault. If you’ve met with an accident because of another person’s fault, you can claim for loss or damage from the other person’s insurer through a third-party claim.
An In-Depth Look at Third-Party Claims
Before you learn more about a third-party claim, it’s important that you know what happens if you don’t make a claim when you’re insured. When you don’t register any kind of claim over the course of your motor insurance policy, you’re entitled to receive No Claim Discount (NCD).
NCD is nothing but a reflection of the way you drive. To put things into perspective, a responsible and safe driver will make the least number of claims during the insurance period while an unsafe driver will make a number of claims.
In Malaysia, NCD entitlement works much like a reward programme and helps reduce the overall insurance premium that’s payable annually. The NCD rate can vary according to the class of vehicle you own.
Most people look to avoid making motor insurance claims for fear of losing their NCD entitlement. In case of an own damage claim, you’re sure to lose your NCD irrespective of who caused the accident. But, if you play your cards right, you could retain your NCD while still being compensated for your loss. This is where making a third-party claim can seem like a sensible move.
To begin with, there are two ways of making a third-party claim:
- Submit the claim to the other person’s insurance company.
- Submit the claim to your own insurer.
As opposed to what happens with an own damage claim, submitting a third-party claim to your insurance company won’t result in the loss of NCD entitlement. In fact, you can expect your claim to be processed much quicker by your insurer when compared to the third-party’s insurer.
Making a Third-Party Claim
Now that you’re aware of what a third-party claim is all about, it’s important that you follow the right claims process. Here’s a list of steps you’d do well to follow when making a third-party claim:
- Make a note of the third-party vehicle’s licence number and his/her personal information.
- Click photos of your damaged vehicle and the accident site.
- Get more information related to the third-party’s insurer.
- Ensure to file a police report within 24 hours of the accident.
- Send your vehicle to a panel garage that’s approved by the third-party’s insurer.
- Appoint a licensed adjuster to ascertain the amount of damage or loss to your car.
- Make a claim with the third-party’s insurer for the loss of use of your car during the repair period. This component is called Compensation for the Actual Repair Time (CART).
- Send all the following documents to the other party’s insurance company:
- Duly filled third-party claim form
- Original copy of the police report that was filed by you
- Copy of your NRIC or MyKad
- Copy of your driving license
- Car registration certificate
- Motor Accident Report Form
- Adjuster’s report that includes a bill of all repair costs
- Photos of your damaged car or accident site
What Should You Consider Before Making a Third-Party Claim?
- Keep a record of all damage sustained by your car or property before you go ahead with any repairs. Click photographs at every step.
- Ensure that you keep all auto or property repair bills.
- Inform the other party about your intentions to make a third-party claim.
- Third-party claims don’t require an excess to be paid.
- For further assistance with the claims process, get in touch with your insurer right away.
Making a third-party claim can be lengthy and time-consuming. To expedite your claims process, the better option would be to make a claim with your own insurer. In addition, the amount of coverage you get from your insurer may be greater.
However, in cases where you continue to deal with the third-party’s insurer and feel that the approved compensation isn’t adequate, you could always seek legal assistance.