|Allianz Car Insurance
|Zurich Car Insurance
This is the most basic and cheapest car insurance policy offered by insurers. A third party policy basically protects you against the claims of others. If you get into a car accident with another vehicle, and that driver suffers from bodily injuries, this is when the third party car insurance comes in handy as it will help cover the damage caused to the other party.
Under this policy, you are responsible for your own damages and losses, and the insurer will not give you any protection for your car as third party policy only covers you against losses, damages, or deaths caused to other parties.
A third party, fire and theft car insurance policy basically works like a third party policy, but it provides additional coverage to your own vehicle in the event of accidental fire or when your car gets stolen.
But bear in mind that this coverage only covers losses or damages to your car due to fire and theft. It does not include coverage for your car’s damages due to road accidents. Therefore, you can only file claims to the insurers for events where your car is damaged due to fire, gets stolen or is broken into.
A comprehensive policy offers a wider range of coverage for any damage to your own vehicle and the third party vehicle. You still get to enjoy the same benefits as the third party, fire and theft policy, but with additional protection against losses and damages to your own vehicle.
This policy is recommended if you can’t afford to bear the repair costs or expenses for your vehicle in the event of an accident. To encourage more comprehensive policy take-ups, some insurance companies even provide extra benefits for their comprehensive policyholders.
However, vehicles that have not reached a certain age may not be qualified for protection under this policy. Due to its full-scale coverage, having a comprehensive car insurance policy will be more relevant for those who own or plan to purchase a relatively expensive car.
|Third Party, Fire & Theft
|Death or injury to other parties
|Damage to other parties’ vehicles
|Loss or damage to own vehicle due to accidental fire or theft
|Loss or damage to own vehicle due to accident
|Death or injury to driver and passengers of the policyholder
|Cost of premium
All drivers in Malaysia are mandated by law to possess car insurance in order to drive legally on the road. According to the Road Transport Act 1987, you’re liable up to RM1,000 in fine with a potential three years in prison if you’re caught driving without a valid car insurance.
In Malaysia, you must at least buy or renew a third party car insurance in order to get and renew your road tax, which is also mandatory for all vehicle owners. If you’re found driving with an expired road tax, you could be fined for up to RM3,000.
Not all events, damages and losses are covered by the policies we mentioned above. Even if your car insurance company claims they offer the best comprehensive plan, you still need to go through the terms and conditions as well as understand the details stated in the product disclosure sheet. You don’t want to blindly sign up for an important agreement without knowing what is not covered in the deal.
Although you pay and renew your car insurance premium every year, you will not be covered for your own death, medical bills, injuries or funeral costs. Even if you’re signed to a comprehensive policy, it only covers the damages done to your own vehicle and the other party’s vehicle. However, if you need extra protection, some car insurance providers do offer additional coverage in the form of personal accident insurance in the policy.
For a better alternative, you can purchase separate medical or personal accident insurance to help you finance the medical bills.
You will not receive protection from any negligence or careless driving lawsuits filed against you by your passengers in the event that they sustain bodily injuries, experience death or damage while in your car. To avoid being held responsible for these claims, it is advisable to add passengers liability coverage to your policy.
Acts of nature or natural disasters such as floods, landslides, typhoons, earthquakes and storms can damage your vehicle. Your car insurance provider is not responsible for the damages caused by these unfortunate events. Alternatively, you have the option to purchase special perils - an additional coverage against natural disasters.
The value of your car will eventually depreciate, and other parts will wear out over time. This means your car will lose a big percentage of its initial value, especially if the car has been in use for more than five years. Therefore, any loss or damage to your car due to wear and tear, such as corrosion or rust, will not be covered by the policy.
Though there is no harm in upgrading or revamping your car, the policy will not bear any costs for repairs or replacements of car accessories caused by future damage or theft. These accessories include custom rims, leather seats, spoilers, paint, custom stereo system, exhaust system and more. Check with your insurer to see if they offer this coverage as an add-on.
Despite the word "comprehensive" in its name, a comprehensive car insurance policy doesn't actually cover all kinds of possible damages. However, the policy allows you, as the policyholder, to extend additional coverage according to your preferences.
This add-on coverage is a good addition to your premium if you want to insure damages to your windscreen or car windows. Only available as a one-time off purchase, windscreen coverage can no longer be used once it has been claimed, but you can purchase it again for future coverage.
Windscreen coverage includes the front and back windscreen, door window, sunroof glass window, and the tinting and security film on your car’s glass. It will cover all the costs needed if these glass parts are shattered, cracked or damaged.
|RM2,500 x 15% = RM375
The value of your windscreen is determined by the car manufacturer or any workshops who can provide you with true values, which is defined as the price of a vehicle after assessing its value based on the condition of the car. The car valuation process includes checking the car's model, year of purchase and total kilometres driven by the car.
Natural disasters covered under special perils include floods, windstorms, rainstorms, typhoons, landslides and other acts of nature that may damage the vehicle. Don’t wait until the flood ruins your engine; instead, consider this optional benefit to avoid spending a lot of money on the repair costs.
|Vehicle sum insured
|Special perils premium
|RM70,000 x 0.5% = RM400
Although strikes and riots don’t often happen in Malaysia, we’ll never know what the future holds. This add-on coverage might come in handy if such events occur. It covers you against losses or damages to your vehicle due to strikes, riots and other civil commotions.
|Vehicle sum insured
|RM70,000 x 0.5% = RM240
Car insurance policies exclude passengers liability as it is not compulsory for private car owners to cover the liabilities of their non-fare paying passengers. However, if the passenger gets injured, she or he has the right to sue, you, the driver for careless driving. But if you have this optional add-on in your premium, you will be covered for this claim.
This coverage protects you in case your passenger causes any harm or damage to other vehicles.
You’re driving together with your friends on a road trip, and one of them rolls down the window and throws away rubbish on the highway. This act startles the driver in the next lane, causing the driver to crash into the road divider and damage his car. Though the victim sues you for the accident, this add-on protects you from the legal trouble caused by your passengers.
You’re driving with your colleague to meet up with some clients and suddenly your phone notification pops up. While briefly reading the message, you accidentally run a red light and hit another car, causing injury to your colleague. Your colleague sues you for reckless driving. However, by having this add-on to your policy, you will be protected against the legal claims.
Each car insurance allows two drivers to be included in the policy for free. With this add-on, you can have up to four drivers added to the premium, and it costs you about RM10 per person. This add-on is particularly helpful for those who have more than two persons in the household driving the same car.
|Number of drivers
With a maximum of RM40, you can name up to six different drivers to be covered within the one-year duration of the policy.
If you have invested a good amount of money pimping up your car with new accessories like leather seats, GPS navigation and rims, this add-on will compensate you for the damages or losses to your accessories in the event of an attempted burglary or accident. However, stolen tyres and loss of personal items such as wallets, handbags and laptops will not be covered.
|Car accessories value
|RM300 (GPS) + RM650 (Rims) = RM950
|Car accessories premium
|RM950 x 15% = RM142.50
This optional add-on compensates you for the loss of use of your vehicle or for the inconvenience of not having your car. After being involved in an accident, where you’re not at fault, you might not have access to your car as it will be sent to the workshop for days or even weeks. Due to the inconvenience of not having your car, you are eligible to claim for CART and compensation of excess.
The CART rate also depends on the number of working days required to fix the car rather than the number of days it stays in the workshop, subject to an adjuster’s recommendation.
Here’s a standard scale of daily CART for personal vehicles as specified by Persatuan Insurans Am Malaysia (PIAM):
|CART per day
|Up to 1,500 cc
|Between 1,501 cc and 2,000 cc
|2,001 cc and above
Comparing car insurance deals can be a tedious process, but you can make it easier by focusing on several main factors. It’s easy to be spoiled with so many car insurance companies to choose from in Malaysia, all of which come with different deals, premiums and benefits.But before that, ask yourself these questions -
It is always recommended to choose comprehensive policy as it will provide the most coverage for your vehicle as well as gives the option to include other add-on features to the policy. A third party policy or third party, fire and theft policy, on the other hand, might be suitable for an old car or if you rarely drive because of the lower risks associated with both.
Market value is how much your car is worth or priced at dealerships before it was damaged or stolen. If your car is insured at the value of RM80,000 in the beginning, you can expect the market value to go down progressively over time. For example, let’s say your car value has depreciated to RM50,000, and you get into an accident that causes total loss of your vehicle, then your insurer will only be able to cover the current market value of RM50,000 instead of RM80,000.
When you insure your car based on the market value, there’s a possibility for you to under-insure and over-insure your car depending on these two situations:
a) Under-insure: This happens when you insure your car below the market value. The sum insured will be calculated based on the formula below:
Formula: Loss amount payable = Sum insured/Market value x Assessed loss
You insure your car for half of the market value at RM40,000. If your car is involved in an accident that causes damage or loss amounting to RM20,000, your insurer can only cover half of the cost as agreed in the policy which is RM10,000 sum payable.
Loss amount payable = RM40,000/RM80,000 x RM20,000 = RM10,000
The balance RM10,000 will be borne by the policyholder.
b) Over-insure: This is when you get your vehicle insured above the market value. When you over-insure your car, the claim amount will be subject to the market value of the car at the time of damage or loss.
You signed off a policy contract with an agreement to insure your car above the market value at RM85,000. When you get into an accident and your vehicle accumulates damages that cost RM20,000, your insurer will only provide the amount claimable based on the repair bill.
Loss amount payable = RM85,000/RM80,000 x RM20,000 = RM21,250
As a result, there’s a RM1,250 excess after the payout is calculated. However, this additional amount will not be credited back to you.
An agreed value is the predetermined value of your car that you and the insurer have agreed upon at the beginning of the contract. The value is based on the vehicle’s model and age. By insuring your vehicle with an agreed value, there would be no risk of under or over-insuring your car. Should you have to claim based on a total loss or theft of your car, the payout will be based on the policy.
Your car is insured at the value of RM80,000 in the agreement. Once the value has depreciated to RM50,000 and you want to claim for damages, your insurer will cover based on the agreed value of RM80,000.
Tip: Insurance companies recommend insuring your car based on the agreed value as it allows the policyholder to claim according to the value that has been specified in the policy.
Although it is only an add-on, you should always be ready for any catastrophic events that could happen. Since natural disasters can happen in an instant, it is reasonable to have your vehicle protected against floods, storms or landslides.
Does the insurance company provide 24/7 customer care support? If not, be sure to add it because you want to avoid not getting any response from your insurance company if or when your car breaks down at 3 a.m. in the morning. Most insurers now offer a 24/7 service for their customers, but you can still ask them for reassurance.
You can save more time by buying or renewing your car insurance online at CompareHero. By comparing different car insurance deals on a single platform, you get a more comprehensive look at the different options available in the market. Make your research and application easier with just a few clicks!
Previously, car insurance premium rates were almost the same for any insurance company as they were controlled and tariffed by Bank Negara Malaysia (BNM). However, starting 1 July 2017 onwards, BNM implemented motor detariffication for all car insurance policies.
Detariffication is the removal of the tariff structure, allowing insurance companies to calculate premiums based on several factors to match a customer's risk profile. This simply means the insurer can charge you at a different premium price for the same risk behaviour, depending on the insurer’s business risk strategies.
Below are the risk factors insurance companies take into account to determine your car insurance premium:
A lack of driving experience may require you to pay a higher premium. If you are a Competent Driving License (CDL) holder, or have passed your ‘P’ license, there is a higher possibility for you to pay the premium at a lower rate.
According to the Global Status Report on Road Safety 2018, it is reported that Malaysia had over 7,000 fatalities due to traffic accidents in 2016, of which 87% were males. Therefore, these statistics indicate that female drivers are more likely to pay a lower car insurance premium compared to their male counterparts.
The Road Safety Plan of Malaysia 2014-2020 states that road users from age groups 16-20 years old recorded the highest number of deaths followed by those from age groups 21-25 years old. This report shows that different risks are associated with different age groups, another important factor in determining your premium rate.
Careers like doctors, salespersons, site engineers and real estate brokers may be charged with higher premium rates. These careers are typically associated with high levels of stress and lack of sleep which can increase the risk of traffic accidents. Other high-risk jobs include those that require frequent on-road travelling and meeting clients at different locations.
However, not every driver who has a high-risk occupation will have to pay a higher premium. For example, if you work as a real estate broker and use public transportation to commute to work, you get to have a lower premium rate.
If you own an expensive car from a high-end model, your insurance premium will likely be higher. Luxury cars come with high-class features like carbon fibre, hydrophobic window, auto lane keeping and other specialised materials that will cost you a shedload of money to repair in the event of loss or damage.
Those who live in an area where the crime rate is high are more likely to receive a higher premium rate than those who live in a secured neighbourhood. If your house has a locked gate or you live in an access-controlled residence, then you will likely not be charged extra to your premium.
A bad credit score or bad history on previous car insurance claims will make your premium higher. If you have a record of road accidents caused by your own mistakes in your claim history, there’s a higher chance for your premium to increase. This also applies to situations where you were the victim in the car accident because of the risk you have in your driving record.
When buying car insurance, there are several extra fees and charges included. They are as follows:
|Agent commission fee
|Total annual premium
Yes, car insurance is mandatory for all car owners. In Malaysia, car insurance and road tax go hand in hand. Just as you can’t legally drive without a valid road tax, you are also required to possess car insurance to be on the road.
If you do not own car insurance, you won’t be able to renew your vehicle’s road tax from the Road Transport Department (JPJ) Malaysia. And without your road tax, you won’t be allowed to drive on Malaysian roads legally. If you get caught without a valid road tax, you could receive a fine of up to RM3,000 under Section 14(4) of the Road Transport Act (RTA) 1987.
We all get into road accidents at least once in our lifetime. In such events, car insurance safeguards policyholders by helping to cover the costs incurred by any vehicle damages or bodily injuries.
You redeem your coverage by filing a claim. If the incident is covered under your policy, your insurance company will compensate for the cost of the damage caused.
In Malaysia, a car insurance cover period is valid for one year or 12 months. The insurance policy is effective from the time of purchase and renewable on an annual basis.
The extensions offered may differ according to the provider. It’s best to check with your car insurance company if you need further information.
In a serious road accident, there are typically two types of costs to think about - the medical expenses and car repair damages.
In their most basic form, most car insurance policies only cover the death and disabilities of the third party and not you, the driver. Personal accident insurance, on the other hand, can offer you peace of mind knowing that your medical bills are covered in the event of an accident.
You can simply apply and renew your car insurance with us online or call our customer service at +6012-3850211 to assist you further.
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