Renewing car insurance is one of those routine things Malaysians do annually, but do you really know how it works or what it means to have car insurance?
Well, car insurance is designed to protect you financially against the risk of getting involved in an accident and having to pay a huge lump sum of money over the physical damage and vehicle repair costs.
Before Bank Negara announced the liberalization of the car insurance sector, which will take effect on 1 July 2017, local auto insurance was once standardized with the same price and coverage details.
While the outlook of car insurance after liberalization comes into effect is still unclear, you might want to familiarize yourself with the types of car insurance in Malaysia and your claim entitlements in different scenarios.
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This is the most basic and common car insurance bought by car owners as it is mandatory to have this type of car insurance for every vehicle. Having this insurance coverage allows car owners to be protected from having to pay the damages of another car in the event of an accident.
Other than third party coverage, the car owner will be entitled to claim for their own vehicles damage caused by fire or theft.
Car owners are entitled to claim not only for a third party’s physical and vehicle’s damage repair costs but their own as well. On top of that, they are entitled to fire and theft coverage too. Usually, car owners of expensive vehicles will sign up for this type of insurance plan.
Related: 3 Main Types of Car Insurance Coverage (And What They Actually Cover)
Here is a better view of the three types of car insurance in Malaysia:
| Third party cover | Third party, fire & theft cover | Comprehensive cover | |
| Liabilities to third party for: - Injury - Death - Property loss/damage |
Yes | Yes | Yes |
| Loss/damage to own vehicle due to accidental fire/theft |
No | Yes | Yes |
| Loss/damage to own vehicle due to the accident |
No | No | Yes |
| Liabilities to driver & the passenger of their own vehicle (property, bodily Injury, death) |
No | No | No |
However, you need to know that your standard motor insurance policy DOES NOT cover:
There are 32 car insurance providers in Malaysia as listed below:
So, if you are shopping for a new car insurance plan, or looking for a renewal, you can either visit these providers’ websites or visit Pos Office Malaysia branches near you to buy your car insurance and road tax.
You can use this tool to estimate your car’s market value and then use the figure to estimate the car insurance premium you need to pay based on your criteria using this calculator. Every year, you have to renew both car insurance and road tax by visiting JPJ offices, post offices, or do it online with us here. (You are not allowed to renew road tax without renewing your car insurance policy.)
You are entitled to enjoy No-Claim-Discount (NCD) from your car insurance premium every year if you do not claim any incidences within that year from your insurance provider.
NCD table
| Time | NCD |
| First Year | 25% |
| Second Year | 30% |
| Third Year | 38.33% |
| Fourth Year | 45% |
| Five Years and Above | 55% |
Note: The other party will claim from your insurance company if it was your fault in the accident.
By now, you should have a better understanding of what a car insurance means to you and where to get one. If you want to know more, check out our articles and leave your question in the comment section!