Before renewing your car insurance, it's essential to be well-informed and make thoughtful decisions to ensure you get the most value for your money and the right coverage to suit your needs. Premium pricing for Motor Comprehensive and Motor Third Party Fire and Theft insurance has undergone liberalization since 1st July 2017, which means that individual insurers and Takaful operators now determine the premium for car insurance, rather than it being based on the previously set Tariff by Bank Negara Malaysia.
With the liberalization, the insurance industry aims to introduce fairer pricing that considers broader risk factors, innovative offerings tailored to consumers, and improved service standards. However, it's crucial to be mindful that these changes could also lead to variations in premium rates, which might result in car insurance becoming more expensive.
Consider these valuable tips to ensure you get the best value and sufficient coverage tailored to your needs.
1. Choosing the Right Coverage
When it comes to car insurance, finding the right level of coverage is crucial. Are you aware that you could potentially under-insure or over-insure your vehicle? Before deciding on the type of car insurance and coverage, it's essential to understand what the standard car insurance includes:
- Coverage for your own death or bodily injury.
- Liability protection against claims from passengers.
- Protection against theft of non-factory fitted vehicle accessories, such as car stereos, leather seats, or sports rims (unless otherwise declared).
- Exclusions for depreciation, wear and tear, mechanical or electrical breakdown failures, or breakages.
- Protection against loss or damage from natural events like floods or landslides.
To ensure you strike the right balance, compare car insurance plans on CompareHero and get rewarded(additional coverage with extra premium might be required).
2. No Claim Discount (NCD) Feature
Understanding the No Claim Discount (NCD) is a crucial aspect of car insurance that shouldn't be overlooked. Your NCD is linked to your name, not your car, and it rewards your responsible driving behaviour. The longer you go without making claims with your car insurer, the more discounts you can enjoy.
Let's say you're considering switching to a new insurance provider, but you worry about losing all the accumulated NCD over the years. Fear not as you can transfer it. Follow the steps below:
- Terminating your current car insurance
- Request an Endorsement letter from your insurer. This letter will endorse your NCD.
- Present the letter to your new car insurance provider to retain your no-claim discount.
In the event of a minor accident resulting in minor damages to your car, think twice before making a claim. If you can afford to, consider covering the repair costs with your funds to safeguard your NCD, which could be more valuable in the long run.
Once you claim your insurance, your NCD resets to zero, affecting the discounts you can enjoy upon renewal.
3. Adds on: should you or should you not?
Consider car insurance add-ons in Malaysia for specific scenarios like floods, fires, and damages from riots. Assess your driving habits and location to determine which add-ons suit your needs. For flood-prone areas like Kelantan, get flood coverage. Windshield coverage is generally recommended for all drivers to cover repairs without affecting your No Claim Discount (NCD). Choose add-ons that align with your requirements for extra protection while driving.
4. Length of coverage
Car insurance requires a minimum coverage period of 12 months. You may decide you want to renew it for only 6 months because you intend on selling your car in the near future. What happens then? This is only doable when you have an existing policy. You can ask your insurance provider for an extension of 6 months, but remember extensions can only be done with your existing car insurer.
5. Keep your options open
When purchasing car insurance, it's vital to keep in mind that your insurance needs may evolve. To ensure that you have the most suitable coverage, it's recommended to review your policy annually and make necessary adjustments. Life events such as buying a new car, relocating, or changes in your driving habits could impact your insurance requirements. By conducting an annual review, you can stay up-to-date with any modifications in your coverage needs and potentially discover new opportunities for discounts or better policy options.
By following these five essential tips, you can secure the most suitable car insurance coverage and drive with confidence on the roads. Stay informed, proactive, and well-prepared to ensure a safe and secure driving experience for yourself and your loved ones.
Related: How To Claim Your Car Insurance