The increasing number of road accidents is the reason why one must take a good car insurance policy. It is important to protect yourself, your car, and also the other parties who are involved in the accident. A good car insurance will bear all the financial burden in the event of an accident. Before road tax can be purchased in Malaysia, you are required to have motor insurance.
Coverage Offered by Car Insurance
The following are the three category covers that you can get:
Third Party Cover:
This is the most basic policy. It protects the driver, passenger, and the car. It covers liabilities to the third party for death, injury, and property damage or loss. The repairs to the third party’s car will also be covered.
Third Party, Fire, and Theft Cover:
This covers liabilities to the third party for death, injury, and property damage or loss. It also covers loss or damage to your own vehicle due to theft or accidental fire. This is basic protection for your own vehicle.
This is the best coverage among all three. You will get cover for the third party for death, injury, and property damage or loss. You get cover for loss or damage to your own vehicle due to theft or accidental fire. It also covers loss or damage to your vehicle due to an accident.
The premium rates for these covers are governed by Bank Negara Malaysia and General Insurance Association of Malaysia and the rates change every year. You can get additional cover based on your individual needs. You can get cover for damage caused to the windshield, damage caused by civil unrest, for expensive audio equipment, etc.
Factors that Affect the Premiums
The factors that affect the premiums are as follows:
- Location: The base value of the insurance will be affected by the location. The base rate differs if the car is in East Malaysia or West Malaysia.
- Total insured value: The total insured value is what you are going to insure your vehicle for and it is acceptable for you to over insure or under insure your car. If you under value your car, you will get compensated for the amount insured only and you will have to bear the additional costs. Overvaluing your car will mean that you have to pay higher premiums, but the insurance company will compensate for the market value of the car only.
- Cubic capacity: The size of your engine is also a deciding factor.
You will get a no-claim discount on your policy if you have not made any claim from the previous year. The discount rate is regulated by Bank Negara Malaysia and General Insurance Association of Malaysia. This discount can reduce the premium amount by up to 50%.
Factors that Influence Risk for an Insurance Company
Following are the factors that influence risk for an insurance company:
- Age of driver: The premiums increase if the driver is less than 26 years old and if he or she is more than 69 years old.
- Age of car: If the cars age is above 10 years, the premiums will become expensive.
- Claims made: If you have frequently made claims, the chances of premium rates increasing are higher.
- Reconditioned vehicles: The adjusters will have to evaluate the condition of the reconditioned car and then decide on the interest.
- High-performance vehicles: The high performing vehicles will have a higher premium.
- High-risk theft vehicles: Cars that have been listed as high risk theft vehicles will be charged a higher premium.
The following optional coverage can be purchased:
- Windshield insurance: If your windshield has been damaged, this insurance will cover the repair cost or replacement. This will not affect your no-claim discount.
- Special perils: You will get covered if your car has been damaged by landslides, floods, earthquake, etc.
- Audio and accessories: You get covered if your car accessories are damaged. This will not affect your no-claim discount.
- Number of authorised drivers: You can increase the number of authorised drivers in the policy by paying a premium.
- Gas conversion kit and tank: You get cover for Gas conversion kit and tank.
- Number of seats: A certain premium is charged for cars with more than 5 seats.
- Legal liabilities of passengers: This is useful to cover legal liabilities of your passenger for negligence.
- Compensation for assessed repair time: This is compensation provided for your time that your car was in the workshop for repairs.
- Legal liabilities to passengers: This is used in the event the passengers from your car sue you for negligence.
Based on the driver’s history, most insurance companies charge an additional premium to compensate for the risk that they are taking.
Most insurance companies issue car insurance for cars that are less than 15 years of age and whose minimum value is RM10,000. If the age of the car and the minimum value are exceeding, the risk is high and the insurers charge a high interest rate.
Top Car Insurance Companies in Malaysia
Following are the major car insurance providers in Malaysia:
- Allianz Car Insurance
- AIG Car Insurance
- AXA Car Insurance
- Kurnia Car Insurance
- Etiqa Car Insurance
When taking an insurance, compare the policy and go through the terms and conditions. You must get your queries related to the policy addressed at the time of taking the policy.
How To Apply For A Car Insurance Online
There are a few things that need to be kept in mind when applying for a car insurance online in Malaysia:
- Market Value of the vehicle. If the vehicle is new, the insured value will be equal to the purchase price.
- Make sure that you choose a sustainable claim amount that is both affordable when it comes to paying the premiums and at the same gives you comfortable claim amount when needed.
- The policy applicant has to make sure that he/she gives all the information about the vehicle and the driver in details as it is essential by most car insurance companies for proving you the right amount for coverage.
- There are certain cases under which these claims are not accepted by the insurance companies. You need to be aware of what are the exceptions for claims.
Once you have chosen an adequate car insurance for your vehicle, simply apply with the required documents. Incase you are taking a car loan, online car insurance from the same company if available may be beneficial. All this can be researched when you buy your car insurance online. If you have the documentations ready, the application time will only take a few minutes.
When Might An Insured’s Claim Be Rejected by A Car Insurance Company
Some of the claim restrictions of a motor insurance varies of the policy that the car insurance company is providing, but the following are the general exceptions that an insured has to keep in his/her mind:
- In the case of death or bodily injury to the insured or the driver of the insured vehicle caused by a motor accident. For covering the car owner or the driver the personal accident insurance or medical insurance will help the individual financially.
- The passenger is also exempted from claiming any amount in the case of a motor accident if he/she was in the insured’s car. However, certain car insurance companies offer the advantage of paying higher insurance premiums that includes Passenger Liability Extension Cover, in case the passenger sues the driver or owner of the car. In such cases the insured or driver is liable for the passenger.
- If the insured vehicle has any non-factory fitted accessories such as sports rims, car stereos, leather seats, etc and they get stolen, you cannot claim any amount. Hence, it is advisable to add security systems to your car to ensure that your precious vehicle accessories do not get stolen.
- If the vehicle has been through depreciation, consequential loss, wear and tear, mechanical, technical breakdown failures, or breakages the claimable amount gets lower. However, remember to read the car insurance company’s definition on the above mentioned situations as it may vary on the provider.
- Note that it is very difficult to get an insurance for your vehicle if its over the age of 15 years and the depreciation of the car price amount may also affect the ultimate claim amount even if your are able to get an insurance for your old car.
- In the case the car has been subject to damage due to acts of nature such as typhoons, earthquakes, landslide and floods you will not be covered for the consequences to your car. However, some insurance companies do provide you the option for paying higher premiums to avail claims even for the passengers under such circumstances.
Car insurance Calculator - To Calculate Your Monthly Premiums
Generally, there are many factors when go into calculating the insurance premium based on the insured’s driving record and most importantly the state of the car. Hence, it is essential to keep such factors in mind. However to get an estimate insurance premiums the policyholder will be payable for car insurance, you use an online car insurance calculator. Premium amounts also vary depending on the details of your plan such as type of coverage, engine capacity, NCD and additional benefits.
Car Insurance FAQs
What are the types of car insurance available in Malaysia?
A. There are 3 types of car insurance available in Malaysia that include third party cover, third party fire, and theft cover, and comprehensive cover policies.
Which is the cheapest insurance policy type I can avail?
A. The third party cover only covers the third party involved in the accident, i.e. everyone else other than the insured and the driver affected by the unfortunate event.
Can the driver or insured claim against their injury or death?
A. None, of the insurance policies for the car permit that, instead the personal accidental insurance or medical insurance can be used, if the need arises.
Which is the most advisable insurance cover available?
A. Comprehensive cover provides the maximum coverage by law, but the premium prices are the highest.
Can I avail a car insurance if the vehicle is older than 15 years?
A. Very few car insurance providers may be ready to provide you with insurance, however even if they do, there are very high chances that they will charge very high premiums to insure the car.
How can i calculate premiums for a car insurance quickly?
A. There are many factors that go into deciding the premium payable for the insured amount of the car and an accurate amount for premiums can be calculated only when applying for the policy. However, a rough estimate can be calculated with the help of online car insurance calculator.