Mythbusting: 5 Common Auto Insurance Beliefs That Are Not True
Though it is mandatory for every motor vehicle to have motor insurance coverage, most people are not aware what exactly that coverage includes.
In general, there are three types of auto insurance, namely, Third Party Cover, Third Party, Fire and Theft Cover, and Comprehensive Cover, where each encompasses different coverage for the driver and his or her motor vehicle.
Most people understand their auto insurance only through what they have learnt from their friends or through horror stories that in turn were from a friend of a friend’s sister’s husband’s nephew (so the facts may have been a little lost).
Here are some of the most common false impressions that you may have about your auto insurance coverage:
#1: Deaths or injuries to yourself (the driver) and your passengers are covered
First party (including your passengers) deaths and injuries sustained in a road mishap are actually not covered, even if they are comprehensive policies. No compensations will be provided for any trauma or fatality by the first party.
According to a report conducted by the Highway Planning Unit of the Ministry of Works Malaysia, the statistics of road accidents recorded is on an increasing trend. The number of deaths caused by road accidents in 2003 was 6,286 whereas in 2012, the number increased to 6,917.
Therefore, it is always best to drive safely and adhere to the speed limits to avoid any unwanted events. This should be given even more importance considering the upcoming festive holidays’ balik kampung tradition, where there is usually an increase in the number of road accidents recorded.
It is also important to ensure you and your passengers have life and medical insurance coverage because it’s through those that you’ll get coverage.
#2: Modifications and accessories are covered
Motor heads with a tendency to install fancy modifications and equip their vehicles with cool accessories will find these items not claimable (or replaceable), in case of a car accident, unless you’ve already informed your insurer. This will result in a higher premium due to the increased coverage.
So, avoid expensive modifications and adding pricey accessories or you may be in for a heartbreak if your ride gets involved in an unfortunate mishap.
#3: Damage caused by floods, landslides, and storms are claimable
If you think your standard comprehensive policy covers your vehicle when damaged by natural disasters, think again.
In most standard comprehensive policies, damages on your car caused by natural occurrences are not insured, unless you pay extra to include the Special Peril rider to complement your comprehensive automobile insurance.
If you don’t have that, always try to avoid areas that are prone to natural events. Park your car on higher ground and avoid driving on landslide-prone areas during heavy downpours. Be extra careful if you commute to areas that are prone to natural disasters, such as flash floods and landslide areas.
#4: Accidents caused by negligent passengers are covered
Always remind your fellow passengers, especially those who tend to be a little careless at times, to be alert and careful when on the road. Any accidents caused by the negligent passengers are very likely not be covered by your auto insurance.
One rather common occurrence of passenger negligence in Malaysia is opening the vehicle door without checking on any approaching vehicle (especially on-coming motorcyclists).
Opening the car door carelessly could easily cause incoming vehicles to crash into the door, sometimes, even causing fatalities. Therefore, always remind your passengers to look out for incoming vehicles before getting out of the car.
#5: Items stolen from your car are claimable
You will not be compensated for any loss of personal belongings from your car. Always remember not to leave your valuables in your car or leave your bag in plain view when you are driving.
With the ever rising crime rates, particularly on car thefts in Malaysia, car break-ins have become almost an everyday occurrence.
If you’re fortunate enough, they might just leave your car unharmed (or not stolen), and just settle by taking your belongings. Things like mobile phones, handbags, briefcases, laptop computers, credit cards, and cash are the usual catch for thieves. Some may even steal car batteries or stereo if they have nothing else to take.
Don’t be too quick to depend on your insurance to cover all your automobile needs. Always check through your policies before making an assumption.
Still, it is always better to take preventive measures to avoid yourself getting into the situations in the first place. Drive safely and courteously. Avoid using high risk routes and be cautious with your belongings while driving and parked!