Caricarz Guide To Car Insurance Basics For Every Malaysian Driver

Malaysia boasts some of the highest global rates of road fatalities. Over time, there has been a rise in the number of traffic accidents in the nation, with one occurring every minute. Car accidents can occur without warning, even to the most cautious drivers; they can be minor collisions, large collisions, or natural disasters. 

As a means of protecting you as a car owner, motor insurance is mandated by law in Malaysia when you buy a vehicle. In Malaysia, there are many different kinds of auto insurance, and you can also choose to add special perils coverage or windscreen protection for extra security.

There are three different kinds of auto insurance policies, each with a different level of coverage. The three primary types are Third-Party Fire and Theft Insurance Coverage, Third-Party Insurance Coverage, and Comprehensive Insurance Coverage.
Third Party Car Insurance
As the name implies, third-party insurance only covers third parties in accidents caused by the car owner. Every vehicle must have at least Third Party Car Insurance coverage in order to be legally driven on public roads.

Essentially, third-party auto insurance covers lawsuits brought by outsiders following an automobile owner-caused mishap. This covers recompense for bodily harm, vehicle repair costs, medical expenses, and third-party property damage in addition to physical damage to the vehicle.

You CANNOT claim insurance for fixing your own vehicle; third-party insurance will only cover the costs of repairing the vehicle you struck in an accident. The following year, your No Claims Discount (NCD) rate will be 0% in the event that a claim is filed against your insurance. Third-Party Fire and Theft Insurance Coverage

The third-party, fire, and theft policy provides the same coverage as the third-party only policy, but also includes coverage for damages caused by accidental fire and theft of your vehicle. It is slightly more expensive than the third party only policy, but less expensive than comprehensive coverage.

In addition to providing the same level of protection as third-party car insurance, it protects your vehicle if it is accidentally stolen, damaged, or destroyed by fire. You can only file a claim if your car was stolen, damaged by attempted theft (such as broken door locks, windows, or stolen audio and accessories), or damaged by fire.
Comprehensive Insurance Coverage
The most comprehensive kind of auto insurance is comprehensive coverage. It provides extra coverage for your own vehicle in addition to coverage against theft and fire, providing the same protection as third-party, theft, and fire insurance policies. Stated differently, this kind of insurance covers both the first party—you—and the third party—other people.

In Malaysia, comprehensive insurance must be purchased for new cars that are financed by banks. If you own an older car or one that is less expensive (i.e., the estimated cost of repairs is manageable and can be financed on your own), you might not require this comprehensive coverage.

Additional Car Insurance Coverage
As your insurance policy states, basic, no-frills comprehensive insurance does not cover all vehicle damage. For example, your insurance will not pay for additional car accessories to be repaired or replaced. To cover the expenses that your insurance does not cover, it is crucial to obtain supplemental coverage for your vehicle insurance.
Here are some additional protections you can consider:
Windscreen Protection
Protection for Additional Drivers
Special Perils Insurance Coverage
Coverage on Accessories Fixed to Your Vehicle

Strike, Riot, and Civil Commotion (SRCC) Protection

Legal Liability to and of Passengers

Windscreen Protection

The smallest stone can cause your windscreen to chip or even shatter, especially if you drive quickly. This windscreen coverage will assist with paying for your windscreen's replacement or repairs without reducing your No Claim Discount (NCD).

You only need to pay 15% of the total amount insured for your windscreen in order to receive windscreen coverage. Please take note that during the policy's one-year duration, you may only use this coverage once.
Protection for Additional Drivers

When you file an insurance claim, you will be required to pay a penalty of RM400 if someone else drives your car in an accident. We refer to this fine as an unnamed driver excess. In the event that your car is driven by an unidentified driver at the time of the accident, your insurer may also reject your claim.

You can add extra named driver coverage to your insurance to cover anyone else you give permission to drive your vehicle. For the record, you are able to add a free additional driver to the policy in addition to yourself. You will typically be required to pay RM10 for each additional driver after the third.

Special Perils Insurance Coverage
Natural disasters such as landslides, floods, and storms can occur suddenly. If you live in a low-lying or flood-prone area, for example, you may want to include special perils cover in your insurance policy as standard comprehensive insurance does not cover the damage caused by natural disasters.

You will typically need to pay 0.5% of your car's insured value in order to take advantage of this additional coverage. Depending on the insurer, this additional premium may be calculated differently.
Coverage on Accessories Fixed to Your Vehicle
Do you intend to replace your vehicle's accessories? You might want to include coverage for vehicle accessories in your insurance policy if that is part of your plan. Your typical insurance plans do not cover accessories like high-end rims and sound systems. Nevertheless, you can purchase insurance for them as an add-on, which will set you back 15% of the accessories' total value.
Strike, Riot, and Civil Commotion (SRCC) Protection
In Malaysia, riots, strikes, and other civil unrest are rare events. Thus, unless your car is parked in a dangerous area, a dimly lit alley, or in the middle of a scheduled protest, it should be safe. Even though it only costs 0.3 percent of the total insured amount, car owners hardly ever choose this option. In case there are scheduled protests, be cautious about where you park your car next and keep up with the news.
Legal Liability to and of Passengers
You are protected from lawsuits brought about by your own passengers by the legal liability to a passenger (LLTP) coverage. This occurs when you are at fault for an accident involving your car, and your passenger chooses to sue you for harm you caused to them or their loved ones, or for damaging their property. Typically, the LLTP is approximately 25% of the cost of a basic third-party insurance policy.
Your cost of auto insurance is determined by a number of factors. These include your residence, car type, age, and driving record, among other things.  Whatever the reason for your need for auto insurance, you should always make sure you have complete coverage in the event of an accident. Although auto insurance can be pricey, the peace of mind it offers makes the expense worthwhile.