Everything about Motor Insurance: What’s covered and what’s not

Car or Motor Insurance is a requirement for anyone who owns a vehicle. It’s simply required by law and without insurance you can’t renew the car’s annual road tax.  It is in place to offer protection 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. In Malaysia, there are three types of car insurance for the masses: third party, third party fire & theft and comprehensive.  

The most basic motor insurance is the third party type, this coverage provides the owner financial support when paying for damages of another car in the event of an accident. The second is the lesser known third party fire and theft coverage which works like the third party coverage with additional claims available for insurer’s vehicle, in the event of fire or theft. Third on the list and most important of all is the comprehensive coverage, where pretty much everything is covered, including third party’s physical and vehicle’s repairs and owner’s own coverage.

If you’ve just bought a car, be it used or new, it is advisable to compare car insurance quotes from various recognizable insurance providers. This could help save some money, although Bank Negara (National Bank) has standardized motor insurance rates, back in 2017. The other factor is motor insurance benefits might differ from one insurance provider to another. Upon each annual renewal if no claims are made, you’d get up to 55% off the total coverage sum. All said and done, it is advisable to know exactly what’s covered in the motor policy. And remember, never ever underinsure your car!

Car insurance coverage comprises typical components.  Common car insurance coverages are: auto liability coverage, collision coverage, comprehensive coverage, medical payments coverage and personal injury protection. Motor insurance policies in Malaysia differ from overseas’ ones.

Auto liability coverage consists of bodily injury liability and property damage liability. Bodily injury liability refer to the costs related to another person’s injuries if you cause an accident, while Property damage liability refer to damage you cause to another person’s property while driving. In the comprehensive policy, your car is covered from things like theft, fire, hail or vandalism. If your car is damaged by a covered peril, comprehensive coverage helps to pay for repairs and even replace your vehicle (up to the vehicle’s actual cash value) in the event of total loss. This coverage has a deductible, which is the amount you’ll pay out of pocket before your insurer reimburses you for a covered claim. The other similar coverage is the collision coverage. In other countries, car insurance coverages include medical payment coverage and personal injury protection.

In Malaysia, your car insurance might include these optional services:  towing, service and labor repairs, ride-sharing, special or classic car coverage and windscreen/sound system coverage. Check with your insurance provider for details.

Let’s dive into five things you might do and not be covered by your insurance.

Five things you might do and might not be covered by your car insurance

Most Malaysians don’t know read anything, much less an insurance policy. They simply skip the tedious process of going through the details and end up just signing the dotted line. But you need to know what the policy covers and doesn’t. Don’t worry this article has got you covered…

The top five favorite add-ons to a vehicle that your car insurance won’t cover are window tinting, special accessories, non-factory audio or entertainment systems, all forms of modifications and passenger legal liabilities.  However, there is car insurance add-ons you can consider to give extra protection such as windscreen coverage, specific coverage for accessories against theft, special perils (flood, fire, landslide or other acts of nature), and damages and losses incurred caused by strikes, riots and other commotions.

For people in e-hailing line, it is advisable to add legal lability of passenger and legal liability to passengers in your policy. Legal liability of passenger incurs from acts of negligence by a passenger or multiples, while legal lability to passengers covers the policyholder from legal liabilities brought against him or her by the passengers.

The other motor insurance add-ons are additional drivers and compensation for excess repair time. Additional drivers denote that it’s free to add another name to the policy, but more than two names the company charges a small fee. Compensation for excess repair time simply means you’d be paid by the days your car is stuck in a workshop, after an accident.

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