{"id":17551,"date":"2021-05-04T20:00:00","date_gmt":"2021-05-04T12:00:00","guid":{"rendered":"https:\/\/www.comparehero.my\/blog\/uncategorized\/factors-to-consider-before-buying-car-insurance.html"},"modified":"2026-03-27T08:29:00","modified_gmt":"2026-03-27T00:29:00","slug":"factors-to-consider-before-buying-car-insurance","status":"publish","type":"post","link":"https:\/\/www.comparehero.my\/blog\/insurance\/factors-to-consider-before-buying-car-insurance.html","title":{"rendered":"#WhatIWishIKnew – What Factors To Consider Before Buying Car Insurance? We Asked A Financial Expert"},"content":{"rendered":"\n

There are several factors you need to consider when deciding on which car insurance policy to purchase. In this article, we provide some tips to help you navigate this process. Read more to find out!<\/strong><\/p>\n

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Whether you purchase online or through an agent, buying car insurance may not be as straightforward as it seems.<\/p>\n

The process itself may be simpler online because you can compare policies and rates, but there\u2019s still a chance of misinterpreting the terms, jargons and facts, especially if you don\u2019t have access to an expert who can shed more light on the topic.<\/p>\n

And though the internet has made it easier for us to self-educate on various matters and topics, our minds could still be clouded by myths and misconceptions, which in turn, influence our decision-making process.<\/p>\n

To help us identify the different factors to consider before buying car insurance, CompareHero.my spoke to a financial expert to help us get a better perspective on the topic.<\/p>\n

But first – what is car insurance?<\/h3>\n

If you didn\u2019t already know, car insurance<\/a> is a contract between you and the insurance company that protects you against financial loss or damage, in the event of a road accident, and in some instances, theft and fire.<\/p>\n

People buy car insurance to avoid paying a huge lump sum of money to cover the physical damage and vehicle repair costs, but it comes at a premium which must be paid annually. But of course, the type of protection depends on your coverage.<\/p>\n

Car insurance is also referred to as auto insurance, vehicle insurance, and motor insurance, with cars being its own separate category, as it only focuses on cars. For more context, there are other types of motor insurance categories according to different vehicles, such as motorcycles, trucks, and buses.<\/p>\n

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Okay, but is car insurance compulsory – why should you get it?<\/h2>\n

Yes, you don\u2019t really have a choice when it comes to car insurance, as it\u2019s completely mandatory for all drivers in Malaysia to get a valid car insurance policy.<\/p>\n

Without car insurance, you won\u2019t be able to renew your road tax through the Road Transport Department (JPJ). And without your road tax, you won\u2019t be allowed to drive on Malaysian roads legally. If you do get caught driving without a road tax, you will be fined up to RM3,000, according to Section 14(4) of the Road Transport Act (RTA) 1987.<\/p>\n

Beyond the law, there are other serious reasons as to why getting car insurance makes a lot of sense and could easily justify why it shouldn\u2019t be an option, but a must.<\/p>\n

For starters, though we are sure many drivers in Malaysia are responsible on the road, it doesn\u2019t deny the fact that the country had the third highest fatality rate from road traffic accidents in Asia and ASEAN, behind Thailand and Vietnam, according to figures from the latest Global Status Report on Road Safety published by the World Health Organization (WHO) and the World Bank in December 2018.<\/p>\n

The report, based on figures in 2016, states that out of the 7,152 deaths that year, 87% were males and 13% were females. For further context on the severity of this data point – transport accidents (5.4%) were the fourth most common cause of death in Malaysia in 2016, behind ischaemic heart disease (13.2%), pneumonia (12.5%) and cerebrovascular disease (6.9%).<\/p>\n

These statistics clearly show that Malaysians have a higher chance of getting involved in road traffic accidents, compared to their peers from neighbouring countries, and the best way to protect yourself against the possible staggering financial costs is to be insured.<\/p>\n

\u201cAround five years ago, on average, about 20 Malaysians were involved in road accidents per day, but now that number has reduced to about 15 per day,\u201d Yong Chu Eu, Founder and Principal of Money & Life Academy told CompareHero.my. He is also a member of the Malaysian Financial Planning Council and the author behind the financial book,<\/a> \u201cMaster Your Finance, Master Your Life! Five financial strategies to cope with stress.\u201d<\/p>\n

\u201cYou can measure the risk that, we Malaysians, face everyday – that is why we need car insurance. Besides that, you can\u2019t predict when an accident will occur,\u201d he said. \u201cIt\u2019s not advisable to purposely delay renewing your car insurance either – even if it\u2019s just for one day – because accidents can happen within seconds, at any time.\u201d<\/p>\n

Now that you\u2019ve understood why buying car insurance is a necessity, let\u2019s get into what factors one should consider before pressing the \u201cpurchase\u201d button or saying yes to a policy:<\/p>\n

1. Understand what type of coverage you need<\/h2>\n

There are three main insurance types in Malaysia, mainly, third party, third party, fire, and theft (a.k.a. Second party) and comprehensive cover.<\/p>\n

\u201cFrom a definition standpoint, all three coverages are almost the same. The reason why I say this is because if products enter the market, they will need the approval of Bank Negara, and they can\u2019t market it without their approval,\u201d Yong said.<\/p>\n

With that said, the coverage does vary accordingly, but just in case you\u2019re confused over these wordings, here\u2019s a quick overview of how insurance companies term them and what is generally covered by the three types:<\/p>\n