5 Reasons Why Car Insurance Is Important to All Drivers In Malaysia

According to the Federal Traffic Investigation and Enforcement Department director, Datuk Mat Kasim Karim stated that “In total, 566,760 accidents were reported during the Covid-19 Ops beginning March 18, 2020, until Oct 13, 2021, with 5,412 of them being fatal involving 5,739 deaths.”

As a result of this issue, car insurance has become an essential part of anyone’s daily life who owns a vehicle and drives a car. It is critical to ensure that all drivers who own a car are covered in the event that they are involved in an accident and do not have adequate financial resources.

All Malaysian drivers are required to have at least third-party car insurance, and if you are involved in an accident with another party, your insurance coverage will help cover all of the costs on their behalf. However, because third-party insurance is designed to be inexpensive, you are unable to make a claim for loss resulting from damage to both your vehicle and yourself. Reminder: If you do not have third-party car insurance, you will be unable to renew your vehicle’s road tax from the Malaysian Road Transport Department (JPJ) as well.

Here are 5 reasons why you should consider getting car insurance for your own safety and security.

1. It’s a legal requirement

Having car insurance in Malaysia is a legal requirement if you intend to drive on the roads. Don’t forget that driving without a valid policy will result in your license being suspended or even confiscated. It’s pointless to ask, “What happens if I get into an accident without insurance?” because it won’t happen!

Meanwhile, insurance is required to renew road tax, and a vehicle owner must renew both the insurance and the road tax before it expires. In Malaysia, the laws had stated under Section 14(4) of the Road Transport Act (RTA) 1987 if you’re caught driving without a road tax, you could face a RM 3,000 fine!

As a result, it is preferable for you to obtain a car insurance policy rather than being squandered by costly fines that will cost you more than paying a single policy for car insurance!

2. To get you and another party to have a MAXIMUM coverage!

Essentially, if you have car insurance for a third party, it can assist you in making a claim and compensating the person involved in the road accident for his or her injuries as well as any physical damage that was done. Because the cost of bearing the damage can be quite expensive at times, getting third-party insurance coverage is highly recommended!

On the other hand, if you want to protect yourself as well as third parties, comprehensive car insurance is what you need because it provides the most financial protection! Accidents, fire, and theft are all covered by comprehensive car insurance. The insurer will also cover (pay the cost) if an accident occurs involving your vehicle and the person you hit.

Not just that, you will require insurance that covers all parts and components of your vehicle, as some parts can cost more than the vehicle itself. This includes the engine, transmission, battery, and everything else under the hood. Spare parts in Malaysia are quite expensive due to government policy and can easily break the bank if something goes wrong with your ride. When something goes wrong with the bodywork, such as dents or scratches, the paint alone can deplete your wallet. Imagine having to deal with all of these major repairs at once if you do not have car insurance.

3. Owning multiple cars? Don’t worry, because ONE insurance is enough!

According to the Road Transport Act, all drivers are responsible, whether they are driving other people’s cars or not. This is why many insurance companies offer additional driver coverage as part of your current car insurance package, which means purchasing just one policy but insuring 2-3 vehicles rather than purchasing them separately. However, there are some restrictions, so always read the terms and conditions.

4. You will get a lot of BENEFITS in just one policy!

Did you know that, in addition to having a single policy, there are numerous ways to reap the benefits? You will be able to add-ons a lot of extra coverage under your insurance, especially for comprehensive car insurance. This will ensure your car has the maximum protection and that you will not be worried if anything happens to your car in the future!

These are the various benefits that you can enjoy for your car insurance:

  • Windscreen damage
  • Damage arising from natural disasters (eg: flood, landslides)
  • Damage to your vehicle due to riot, strike & civil commotions
  • Damage to your vehicle due to accident
  • Liability to passengers
  • Vehicle accessories
  • Smart key replacement

and more benefits that can blow your mind! You can check out the further list of the benefits of the add-on here.

5. You get to enjoy the No Claim Discount (NCD)

If you have car insurance, you will be able to take advantage of the NCD discount! If you do not make any claims on your insurance policy in a year, you will be given a No Claim Discount (NCD) as this is the reward for a good driver like you! The longer you drive safely on the road without filing a claim on your own policy, the greater the discount you will receive. It is worth it!

Commonly in Malaysia, the NCD discount typically ranges from 25% up to 55% based on the premium payable, and you must have a claim-free record for the previous 12 months to earn it.

The NCD discount will be divided into two categories in Malaysia. Private vehicles will receive greater discounts, up to a maximum of 55% off. Meanwhile, the commercial and motorcycle discounts are limited to a 25% discount.

NCD rate for private and commercial car:

No claim period Private car Commercial car
1st year 0% 0%
2nd year 25% 15%
3rd year 30% 20%
4th year 38.33% 25%
5th year 45% 25%
6th year and onwards 55% 25%

Keep in mind, if you have decided to claim 55% of the NCD rate in that particular year, your NCD rate will return to 0% in the following year.

The benefits of the NCD discount that you can enjoy (except for the first-time car buyers):

  • Windscreen insurance add-ons – Let’s say if you add-ons windscreen coverage in your policy, you will be able to make a claim for the repair without affecting your NCD.
  • No-fault damage – If you are involved in an accident that is clearly not your fault (this must be proven in the police report) and wish to make a claim against your own insurance company due to the damage, your NCD will be unaffected.
  • NCD increases every year – This is your reward as a car owner for driving safely on the road. If you own a car and have never filed a claim under your insurance policy, you will be eligible for the discount. Be sure to drive safely in order to enjoy the NCD!
  • Transfer NCD from the old car to the new one – Because a new car has a higher vehicle insured value in the market, it is a good idea to transfer from your old to a new car because you will receive a larger monetary discount.

Now, you already get the insight why car insurance is important to all drivers, don’t you? Do visit our car insurance page to get further information about car insurance as we are the financial advisor approved by Bank Negara to meet your needs!

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