Vehicle insurance information in Malaysia is regulated under the Road Transport Act 1987 and is mandatory for all vehicles on the road. It is a type of insurance policy that provides financial protection against damage or loss to the vehicle and third-party liability for bodily injury or property damage caused by the vehicle.
There are several types of vehicle insurance policies available in Malaysia, including comprehensive, third-party, and third-party fire and theft. Comprehensive insurance covers damage to the insured vehicle and third-party liability, while third-party insurance only covers third-party liability. Third-party fire and theft insurance covers third-party liability, as well as damage to the insured vehicle from fire or theft.
Insurance companies in Malaysia offer a range of vehicle insurance policies, and it is important to choose a policy that meets your needs and budget. Vehicle owners should compare policies from different insurance companies to find the best coverage and premium rates.
The Road Transport Department (JPJ) is responsible for enforcing vehicle insurance requirements in Malaysia. Vehicle owners must obtain a valid insurance policy before registering their vehicle with the JPJ. Failure to comply with these requirements can result in fines and legal penalties.
Vehicle Insurance Information
Types of Vehicle Insurance Policies
When it comes to getting vehicle insurance in Malaysia, there are three types of policies that you can choose from. Each policy offers a different level of coverage, and it is important to understand the differences between them before making a decision.
Third-Party Insurance
Third-party insurance is the most basic type of car insurance policy available in Malaysia. This policy covers damages or injuries that you may cause to other people or their property while driving your vehicle. However, it does not cover any damages to your own vehicle or injuries sustained by you or your passengers.
Third-Party, Fire and Theft Insurance
Third-party, fire and theft insurance provides the same coverage as third-party insurance but with the added protection against fire and theft. This means that if your vehicle is stolen or damaged in a fire, you will be covered for the damages. However, it still does not cover any damages to your own vehicle or injuries sustained by you or your passengers.
Comprehensive Insurance
Comprehensive insurance is the most extensive type of car insurance policy available in Malaysia. It covers damages to your own vehicle as well as damages or injuries that you may cause to other people or their property while driving your vehicle. Additionally, it also covers theft and fire damages to your vehicle.
Key Components of Insurance Policies
When it comes to vehicle insurance policies in Malaysia, there are several key components that you should be aware of. Understanding these components can help you make a more informed decision when choosing an insurance policy that suits your needs. Below are some of the key components of insurance policies in Malaysia.
Sum Insured
The sum insured is the maximum amount that an insurance policy will pay out in the event of a claim. In Malaysia, there are two types of sum insured – market value and agreed value. Market value is the value of the vehicle at the time of the claim, while agreed value is a pre-agreed value between the insurer and the policyholder. It is important to note that the sum insured should reflect the true value of the vehicle to avoid any potential underinsurance.
Premiums
The premium is the amount that you pay for your insurance policy. The premium is calculated based on several factors, including the sum insured, the age and type of the vehicle, and the policyholder’s risk profile. It is important to note that the premium for a car insurance policy in Malaysia can vary significantly between insurers, so it is important to shop around to find the best deal.
Excess
The excess is the amount that the policyholder will need to pay towards the cost of a claim. In Malaysia, there are two types of excess – compulsory excess and voluntary excess. Compulsory excess is a fixed amount that is set by the insurer, while voluntary excess is an amount that the policyholder can choose to add to their policy in exchange for a lower premium.
No Claim Discount (NCD)
The No Claim Discount (NCD) is a discount that is applied to the premium if the policyholder has not made a claim during the policy period. The discount can range from 0% to 55% depending on the number of claim-free years. It is important to note that the NCD is not transferrable between policyholders.
Add-Ons
Add-ons are additional benefits that can be added to an insurance policy for an extra premium. Some common add-ons for car insurance policies in Malaysia include windscreen coverage, personal accident coverage, and legal liability to passengers. It is important to carefully consider whether an add-on is necessary and whether it represents good value for money.
By understanding the key components of insurance policies in Malaysia can help you make a more informed decision when choosing a car insurance policy. By carefully considering the sum insured, premium, excess, NCD, and add-ons, you can find a policy that provides the coverage you need at a price that suits your budget.
Understanding Car Insurance Coverage
Car insurance coverage is mandatory in Malaysia for all registered vehicles. It is essential to understand the different types of coverage to ensure that you have the right level of protection for your vehicle.
What Is Covered
Car insurance coverage typically includes two types of claims: own damage claims and third-party claims. Own damage claims cover the physical damage to your own vehicle in the event of an accident, theft, or fire. Third-party claims cover the physical damage to another person’s vehicle or property that you may have caused in an accident.
In addition to these basic types of coverage, many car insurance policies also offer additional coverage options, such as personal accident insurance. This coverage provides financial protection in the event of injury or death to the driver or passengers of the insured vehicle.
What Is Not Covered
Car insurance coverage does not cover everything. Some common exclusions include damage caused by natural disasters such as floods, earthquakes, and landslides. Car insurance policies typically do not cover damage caused by wear and tear, mechanical breakdowns, or intentional acts of the driver.
Special Perils Coverage
Special perils coverage is an optional add-on to a car insurance policy that provides protection against natural disasters such as floods, landslides, and earthquakes. This coverage is especially important in Malaysia, where heavy rain and flooding are common occurrences.
Personal Accident Coverage
Personal accident coverage is another optional add-on to a car insurance policy that provides financial protection in the event of injury or death to the driver or passengers of the insured vehicle. This coverage typically includes benefits such as medical expenses, disability benefits, and death benefits.
Claims and Compensation
Insurance Claims Process
In Malaysia, the process of making an insurance claim for a vehicle accident is relatively straightforward. The policyholder must inform their insurance company as soon as possible after the incident and provide all relevant information, such as the date, time, and location of the accident, as well as the names and contact details of any witnesses. The insurance company will then assign an adjuster to assess the damages and determine the amount of compensation.
Compensation for Assessed Repair Time (CART)
Compensation for Assessed Repair Time (CART) is a type of reimbursement provided by insurance companies to vehicle owners for the expenses incurred due to the unavailability of their car. This compensation is calculated based on the time required to repair the vehicle, and the amount can vary depending on the insurance policy.
Knock-for-Knock Claim
A Knock-for-Knock claim is a type of claim where both parties involved in an accident agree to settle their own damages, regardless of who was at fault. This type of claim is often used in minor accidents where the cost of repairs is relatively low and both parties have comprehensive insurance coverage.
In the event of a car accident, the policyholder’s insurance policy will cover the cost of repairs to their vehicle, as well as any damages or losses incurred by third parties. It is important to note that the policyholder may be required to pay an excess fee before the insurance company covers the rest of the costs.
Additional Benefits and Services
When it comes to vehicle insurance, it’s not just about protecting your car from accidents and theft. There are additional benefits and services that can enhance your coverage and give you peace of mind on the road. In Malaysia, many insurance providers offer these extra features to their customers.
Roadside Assistance
One of the most valuable additional benefits is roadside assistance. This service provides help when your car breaks down or you have a flat tyre, battery or run out of fuel. Allianz, for example, offers a tow truck service to its customers. This means that if your car breaks down, you can call Allianz and they will send a tow truck to take your car to the nearest panel workshop for repairs.
Panel Workshop Network
Another useful benefit is access to a panel workshop network. This is a list of workshops that have been approved by your insurance provider. If your car needs repairs, you can take it to one of these workshops and your insurer will cover the cost. This can save you time and money, as you don’t have to shop around for a reputable repair shop.
Windscreen Coverage
Windscreen coverage is an important benefit to have in Malaysia, as the country is prone to heavy rain and storms. This coverage protects your car’s windscreen from damage caused by flying debris, hail, or other natural disasters. Some insurance providers, such as Generali, offer windscreen protection as an additional benefit. This means that if your windscreen is damaged, your insurer will cover the cost of repairs or replacement.
Insurance for Different Risk Profiles
In Malaysia, insurance companies consider different factors to evaluate the risk profile of a vehicle owner. These factors include the type of vehicle, engine capacity, job, and named driver. Based on these factors, insurance companies determine the insurance premium that a vehicle owner has to pay.
For instance, if a vehicle owner has a high-performance car with a large engine capacity, he or she may be considered a high-risk driver. Similarly, if a vehicle owner has a job that involves a lot of driving, such as a sales representative or a delivery driver, he or she may be considered a high-risk driver.
On the other hand, if a vehicle owner has a low-performance car with a small engine capacity, he or she may be considered a low-risk driver. Similarly, if a vehicle owner has a job that involves less driving, such as an office worker or a teacher, he or she may be considered a low-risk driver.
Insurance companies in Malaysia offer different types of insurance policies based on the risk profile of the vehicle owner. These policies include third-party insurance, third party, fire and theft insurance, and comprehensive insurance.
Third-party insurance is the most basic type of insurance policy and covers damages caused to a third-party vehicle or property. Third party, fire and theft insurance covers damages caused to a third-party vehicle or property as well as damages caused to the insured vehicle due to fire or theft. Comprehensive insurance is the most extensive type of insurance policy and covers damages caused to a third-party vehicle or property as well as damages caused to the insured vehicle due to accidents, fire, theft, and other natural disasters.
Insurance Renewal and Road Tax
In Malaysia, it is mandatory for vehicle owners to renew their vehicle insurance and road tax annually. Failure to renew either of these can result in legal action.
Renewing vehicle insurance can be done online through various insurance providers such as Allianz and AIG Malaysia. These providers offer extensive motor insurance policies that cover a range of incidents such as accidents, theft, and natural disasters. It is important to compare insurance policies from different providers to find the best coverage that suits your needs.
When renewing road tax, vehicle owners must also pay a road tax fee. This fee varies depending on the type of vehicle and its engine capacity. Additionally, there may be delivery charges involved when renewing road tax online. MyEG offers road tax delivery services for a fee of RM6 in Klang Valley, RM8 in Peninsular Malaysia, and RM10 in Sabah and Sarawak.
Vehicle owners must ensure that their insurance and road tax are valid before using their vehicle on the road. Failure to do so can result in legal action and hefty fines.
Understanding No Claim Discount (NCD)
No Claim Discount (NCD) is a discount given to vehicle owners by their insurance providers for not making any claims against their car insurance policy. The discount is a reward for being a responsible driver and not causing any accidents or damage to their own vehicle.
In Malaysia, the NCD rate is set by the Persatuan Insurans Am Malaysia (PIAM) and is followed by every motor insurance company in the country. Private cars can enjoy a maximum discount of up to 55%, while commercial vehicles and motorcycles are capped at a maximum discount of 25%.
The NCD rate is calculated based on the no-claim period, which means the number of years a driver has not made any claims against their own insurance policy. The longer the no-claim period, the higher the NCD rate and the greater the discount.
To check their NCD status, vehicle owners can visit the MyCarInfo website and follow the step-by-step guide to determine their NCD rate. They must provide their Vehicle Registration Number and Identification Number (NRIC) to access their NCD status.
If a driver is involved in an accident that is not their fault, the NCD will not be affected. However, if they are at fault, the NCD will be forfeited and they will lose their discount.
Insurance Providers in Malaysia
When it comes to vehicle insurance in Malaysia, there are several insurance providers that offer a range of policies to cater to different needs. Here are some of the most popular insurance providers in Malaysia.
Allianz Car Insurance
Allianz is a well-known insurance provider in Malaysia that offers comprehensive car insurance policies. They offer coverage for third-party liability, loss or damage to your vehicle, and personal accident coverage for the driver and passengers. Allianz also offers add-ons such as windscreen coverage, flood coverage, and more.
Zurich Car Insurance
Zurich is another popular insurance provider in Malaysia that offers car insurance policies. They offer coverage for third-party liability, loss or damage to your vehicle, and personal accident coverage for the driver and passengers. Zurich also offers add-ons such as windscreen coverage, flood coverage, and more.
Takaful Malaysia
Takaful Malaysia is a Shariah-compliant insurance provider in Malaysia that offers car insurance policies. They offer coverage for third-party liability, loss or damage to your vehicle, and personal accident coverage for the driver and passengers. Takaful Malaysia also offers add-ons such as windscreen coverage, flood coverage, and more.
Other popular insurance providers in Malaysia include AIG, MyCarInfo, Tokio Marine, MSIG, Liberty, RHB, Kurnia, Berjaya Sompo, Generali Malaysia, and AmAssurance. It is important to compare policies and coverage options from different insurance providers before making a decision. It is also recommended to seek advice from an insurance agent to ensure that you get the best policy for your needs.
Legal Aspects of Vehicle Insurance
In Malaysia, the Road Transport Act 1987 mandates that all vehicles must have valid insurance coverage. Failure to comply with this requirement is an offence under the law. Vehicle owners must purchase a motor insurance policy that covers third-party liability, which means that the policy will pay for any damages or injuries caused to other people or their property in the event of an accident.
The Road Transport Act (RTA) 1987 requires that all motor insurance policies in Malaysia must provide a minimum coverage of RM10,000 for third-party property damage and unlimited coverage for third-party bodily injury or death. This means that if you are involved in an accident and you are found to be at fault, your insurance policy will cover the cost of repairing the other party’s vehicle or property, as well as any medical expenses or compensation claims arising from the accident.
In addition to third-party liability coverage, vehicle owners can also purchase comprehensive insurance policies that cover their own vehicle against damage or loss due to accidents, theft, fire, or natural disasters. Comprehensive policies may also include additional benefits such as personal accident coverage, towing services, and windscreen protection.
Insurance policies have terms and conditions that must be adhered to in order for a claim to be valid. Vehicle owners should read their policy documents carefully and understand the scope of coverage, exclusions, deductibles, and claim procedures. Failure to comply with the policy terms may result in the claim being rejected or reduced.
How to Choose the Right Insurance Policy
When it comes to choosing the right insurance policy for your vehicle, it can be overwhelming to navigate through the different options available. However, it is important to choose the right policy to ensure peace of mind, safety, and financial protection.
The first step in choosing the right insurance policy is to understand your needs and budget. Consider the level of coverage you require and the premium you can afford to pay. It is also important to compare quotes from different insurance companies to find the best deal.
Once you have narrowed down your options, it is important to read the policy carefully and understand the car insurance coverage provided. Look out for any exclusions or limitations that may affect your financial protection in the event of an accident.
Another important factor to consider is the reputation of the insurance company. Look for reviews and ratings to ensure that the company is reliable and has a good track record of settling claims.
Please consider any additional benefits or features that may be offered by the insurance company. For example, some insurance companies provide car towing services or free personal accident insurance to policyholders.
By taking the time to choose the right insurance policy, you can ensure that you have the necessary financial protection in the event of an accident, and enjoy peace of mind knowing that you are covered.
Car Insurance and Safety
Car insurance is not only a legal requirement, but it also provides financial protection in case of accidents or other unforeseen events. However, it is important to remember that safety should always come first. Here are some tips to help you stay safe on the road:
- Always wear your seatbelt and make sure all passengers do the same.
- Follow traffic rules and regulations, such as speed limits and traffic signals.
- Keep your vehicle maintained and ensure that all safety features, such as brakes and airbags, are functioning properly.
- Avoid distractions while driving, such as using your phone or eating.
- Consider investing in car accessories that can improve safety, such as a dashcam or blind spot mirrors.
In addition to these safety tips, it is important to choose the right car insurance policy to ensure that you are adequately protected. When selecting a policy, consider factors such as coverage limits, deductibles, and additional benefits such as roadside assistance or personal accident coverage.
By following these safety tips and choosing the right car insurance policy, you can help protect yourself and others on the road while enjoying the convenience and freedom of owning a vehicle.