Insurance

Motor Insurance

You need motor insurance when you buy a motor vehicle. Motor insurance covers your vehicle, be it a motorcycle, a car or a lorry, in case of accidents or theft.

There are three common types of motor insurance available: third party; third party, fire and theft; and comprehensive cover. The level of your coverage dictates what you can claim if your vehicle sustains loss or damages.

CHOOSING A POLICY
When it comes to buying a policy, always:
1. Check the market value price of your vehicle. If it is a new vehicle, the insured value will be the purchase price.
2. Ensure that your vehicle is adequately insured as it will affect the amount you can claim.
3. Give all material facts about your vehicle, including previous accidents (if any), modification to engines, etc. When in doubt, it is best to ask your insurance company.

HOW MUCH SHOULD I COVER?
Make sure that the amount covered in your motor insurance certificate reflects the market value of your vehicle and not any other value to avoid over-insurance or under-insurance. You may check the market value of your vehicle from www.carprices.com.my.

HOW DO I MAKE A CLAIM?
If you are involved in a motor accident and have a comprehensive cover, you may either make an own damage claim or a third party claim. There are different procedures involved. Inform your insurance company immediately and act according to their instructions. You may need to send your damaged vehicle to an approved workshop. You may check for the list of approved workshops from your insurance company. Make sure you send all relevant documents to support your claim to your insurance company as soon as possible.

CANCELLING YOUR POLICY
You may cancel your motor insurance policy at any time by notifying your insurance company in writing, inclusive of the date you want to stop the policy.

It is a good idea to have a new policy in place before cancelling your previous one so there is no gap in between coverage.

Insurance companies also generally offer a refund premium based on how old your current insurance policy may be, the newer it is when you cancel it, the more refund you will receive.

Key Terms & Conditions

No-Claims-Discount (NCD)	The premium payable may be reduced if you have no-claim-discount (NCD) entitlement. NCD is a ‘reward’ scheme for policy holders who have no claims made against their policies during the preceding 12 months.
Excess	Also known as a ‘deductible’. This is the amount of loss you have to bear before your insurance company will pay for the balance of your vehicle damage claim. The types of excess applicable are as follows: Compulsory excess of RM400 If your vehicle is driven by a person not named in your policy or a person named in your policy who is under the age of 21, the holder of a provisional (L) driving licence or the holder of a full driving licence of less than two years. Other excess Applicable at the discretion of your insurance company and in some cases, no excess is imposed. You can negotiate with your insurance company on this excess.
Insurance Policy	When you buy a motor policy, you will get a confirmation slip containing details of your motor cover as confirmation of purchase. Within one month from the date of your insurance purchase, you should receive: The Schedule which shows: -your name and address -details of the vehicle -the sum insured (for comprehensive and third party fire & theft policies) -the period of insurance -the policy number -your NCD entitlement -premium breakdown -excess -named drivers The certificate of insurance -which shows: -your name -vehicle model -registration number and cubic capacity (engine CC) -period of insurance -authorised drivers -limitations of use In some cases, this may be issued at the point of purchase. A motor policy which shows the terms and conditions of cover provided by your insurance company. If you do not receive your policy within one month, you should check with your insurance company.
Loading	The most commonly used loading factors are your age, any adverse driving characteristics, cubic capacity (engine CC), specific claims experience of your vehicle and re-conditioned vehicles. The insurance company can apply a loading on you to ensure that the amount charged commensurates with the risk borne by them.
Indemnity	The insurance cover will compensate your loss by putting you back to the same financial position as you were in immediately before the loss. You cannot profit from an insurance claim.Therefore if your vehicle is more than 5 years old, betterment will apply.
Betterment	Betterment is, when you repair your vehicle after an accident, and you need to replace one part with a new franchise part, for example, your old bumper is replaced with a new franchise part. The application of betterment however, is at the discretion of your insurance company. If they apply betterment, it will be in accordance with the standard scale of betterment adopted by the industry.

Type of Coverage

	Types
COVER	Third Party Cover	Third Party, Fire & Theft Cover	Comprehensive Cover
Liabilities to third party for: -Injury -Death -Property loss/damage	YES	YES	YES
Loss/damage to own vehicle due to accidental fire/theft	NO	YES	YES
Loss/damage to own vehicle due to accident	NO	NO	YES
Liability to driver and passenger of own vehicle (bodily injury, property, death)	NO	NO	NO

EXCLUSIONS
Your standard motor insurance policy does not cover:

-Your own death or bodily injury.

-Your liability against claims from your passengers.

-Thefts of non-factory fitted vehicle accesories (car stereos, leather seats, sports rims etc) unless otherwise declared.

-Consequential loss, depreciation, wear and tear, mechanical or technical breakdown failures or breakages.

-Loss/damage arising from an act of nature, e.g. flood, landslide.

However, you may pay additional premium to cover some of the above exclusions e.g. floods or your liability against claims from your passengers. Windscreen and vehicle accesories cover are also useful extensions to consider preserving your No Claims Discount (NCD) in the event of loss/damage. You can check for other exclusionsand extension covers available with your insurance agent or company.

Source Insuranceinfo.

Insurance Tips

There are many important considerations when it comes to buying a vehicle. Insurance is one of them. Read these important points to note when it comes to buying motor insurance:

INSURED VALUE / SUM INSURED

You need to protect your interest by purchasing a motor insurance to ensure that your vehicle is adequately insured so that you will receive the claim amount in the event of loss or damage. For a new vehicle, the insured value is the purchase price. For other vehicles, the insured value is the market value of the vehicle when you apply for insurance policy.

It is important to insure your vehicle for its exact amount to prevent the following circumstances:

Under-insurance - If you insure your vehicle at a lower sum than its market value, you are considered as self-insured for the difference, i.e. in the event of loss / damage, you will only be partially compensated (up to the proportion of insurance) by your insurance company.

Over-insurance - Should you insure your vehicle at a higher sum than its market value, the maximum compensation you will receive is the market value of the vehicle as the policy owner cannot ‘profit’ from a motor vehicle claim. Therefore, you would have paid higher premiums for nothing.

DUTY OF DISCLOSURE

Disclose all material facts fully, including previous accidents (if any), modifications to engines, etc. When in doubt as to whether a fact is relevant or not, ask your insurance company.

By failing to reveal any material facts, your insurance company may refuse to pay your claim or any claim made by a third party against you. In such cases, you are personally liable for such claims.

PRICE

The price of motor insurance depends on the type of policy you select. The insurance premium charged by your insurance company is the standard minimum rate in accordance with the Motor Tariff.You can compute the standard premium charged from the premium calculator here.

In addition to the standard minimum rate, your insurance company may impose additional premiums known as loadings to the premium payable in view of higher risk factors involved such as age of vehicle and claims experience. Loadings are governed by Bank Negara Malaysia (BNM) and no insurance company may charge loadings higher than the levels permitted by BNM.

Reward schemes such as no-claim-discount (NCD) can also let you save money by ferent NCD rates applicable for different reducing your premiums. There are diflasses of vehicles. For a private car, the scale of NCD ranges from 25% to 55% as provided in the policy.

E-INSURANS

The electronic cover notes system under JPJ eINSURANS is part of the e-Government initiative undertaken by the Ministry of Transport for road tax renewal. With effect from 2 January 2005, insurance companies and takaful operators will transmit motor insurance/takaful information electronically to the Road Transport Department (RTD) and policy owners will receive confirmation slip from their insurance companies/takaful operators/agents as proof of insurance/takaful purchase. Upon confirmation of successful transmission by insurance company/takaful operator/agent concerned, policy owners will then proceed to either RTD or Pos Malaysia offices for road tax renewal.

The electronic cover notes system will be operational for new registration and renewal of road tax only whereby physical motor insurance/takaful cover notes/policies will not be required for road tax renewal.

Important notice

Vehicle owners must ensure that they:

-Provide a copy of their vehicle registration card to their insurance company/takaful operator/agent at the point of purchase of motor insurance/takaful cover;

-Receive the confirmation of successful transmission of their cover note information to JPJ from their insurance company/takaful operator/agent prior to road tax renewal.

-Contact their insurance company/takaful operator/agent for assistance in the event they face difficulties in road tax renewal.

Source of information:
Bankinginfo
Bank Negara Malaysia

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