Motor Insurance in Malaysia

Owning a car in Malaysia is easy but there are regulations that you must follow in order to do so. Having motor insurance is one of them. It is actually mandatory to buy motor insurance if you are to own any vehicle as it is required by law.

What is it and what does it do?

Basically, the insurance company offers you the contract that will protect you in the event of an accident or theft. You will then pay the premium annually (or in some cases, every 6 months). It must be noted that in the year 2016 alone there has been more than half a million reported road accidents that attributed to about 7,000 fatalities. This shows the significance of having motor insurance.

What you should know about motor insurance?

Most, if not all insurance company offers motor insurance plans which are similar in nature but comes with their own perks and benefits. Before you buy any plan, make sure you know what they are. In general, there are 3 types namely:

  • Third-party motor insurance which provides coverage for any third party in the event of a car accident. This means that it covers the expenses for the victim’s vehicle if you are the fault of the accident. Third-party motor insurance, which covers medical expenses too is the most basic and common type of plan.
  • Third-party, fire and theft is actually the same as the first type with additional coverage. As implied, it means that you get coverage in the event that the vehicle is stolen or damaged due to fire.
  • Comprehensive cover is the highest among the 3 which include expenses for your own vehicle which means the premium is highest as well.

Make sure that you are aware of what you are entering into before deciding to buy the motor insurance. Among the issues that you must know include:

  • Term – Motor insurance usually cover a term of 12 months. This is an essential step you must take in order to pay for your road tax. Without your motor insurance, you will not be able to renew your road tax which means your vehicle is not road-worthy to be driven on Malaysian roads.
  • Price of your vehicle – This refers to the market value of your vehicle which will then determine the sum assured. The higher the market value, the higher the sum assured will be. Take note that the value of the vehicle depreciates every year. So it is natural that your premium decreases too.
  • Agreed value – This refers to the maximum amount that the company will pay in the event that the vehicle is totally destroyed or stolen.
  • NCD – short for Non-claim bonus, it is a discount offered for the premium each year for not making any claims during the 12-month period. The NCD increases each year which means you pay lesser each year as long as you have not made any claim. The discount starts from 25% in year 1, 30% in year 2, 38.33% (year 3), 45% (year 4) and 55% from year 5 onwards.
  • Windscreen coverage – You can pay a little additional to cover your windscreen which is one of the most common damages to the car. Take note that claiming for the windscreen will not affect your NCD
  • Special Perils Coverage – This is additional coverage for natural disasters like earthquakes and floods which are otherwise known as Acts of God.
  • Car Accessories Cover – Some insurance companies provide coverage for expensive items like tyre rims, car stereo systems and such.

Motor Insurance plans in Malaysia

Most of the insurance companies will provide you with a motor insurance plan in one way or another with some having more benefits as they are more popular in this sector. Below are some of such plans by these companies:

  • AIG Comprehensive Motor Insurance is one of the most popular motor insurance products which gives you up to 12 months warranty for motor repairs and 0 additional payments. Besides that, you get to enjoy full payout on total damage to your car and free roadside assistance too.
  • RHB Insurance Comprehensive Private Car Insurance – Towing assistance of up to RM200 and repairs get up to 3 months warranty too.
  • Kurnia Comprehensive Motor Insurance is a plan that comes with free flat tyre change services and towing of up to 50km.
  • Lonpac Comprehensive Private Vehicle – Comes with 24-hours emergency assistance and towing of up to RM200 and helps for hotel accommodation if required.
  • Berjaya Sompo Private Motor Insurance is one of the popular names in motor insurance that provides towing of up to RM300 and even temporary car usage if required.
  • Allianz Comprehensive Motor Insurance comes with free towing services, roadside assistance with a wide range of workshops nationwide.
  • AXA Affin Comprehensive Motor Insurance is a plan that gives you up to 20% discount for safe driving and warranty of up to 12 months for any repairs done.
  • Tokio Marine Comprehensive Motor Insurance – Comes with temporary car usage if required and RM200 towing services.
  • Etiqa Comprehensive Private Car Insurance provides 24-hour Etiqa Auto Assist services
  • AmGeneral Private Car Insurance provides for free repair cost and coverage for accidental death as well as car accessories if you like.
  • MSIG Comprehensive Motor Insurance is a plan that gives unlimited coverage for accidental death and bodily injuries
  • Maybank Comprehensive Motor Takaful come with free repair cost and coverage for accidental death, among others.
  • Zurich Takaful Car Insurance is one which you can add on coverage like flood and other disasters with 0% repair cost.
  • Pacific and Orient Comprehensive Motor Insurance – this is a plan that gives your vehicle total coverage from accidents to the windscreen and other common problems.

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