Best Car Insurance Providers in Malaysia

What Is Car Insurance?

With over 400,000 recorded road accidents in 2010 along with how cars are becoming indispensible assets, getting a good insurance policy has never been more important to protect not just yourself and your car, but the other parties who may be involved in accidents.

An insurance policy will protect the driver from bearing all the financial burden in the event of an accident, in exchange for an annual insurance premium.

Motor insurance is required by law in Malaysia for vehicles before road tax can be purchased. There are generally three categories of insurance policies, Third Party, Third Party with Fire & Theft and Comprehensive coverage. The coverage for the policies can be seen in the following table.

Third party insurance is the most basic policy, protecting only the third party in an accident, i.e. the driver, passengers as well as the car that you got into an accident with. This covers the repairs to the third party’s car, and injury or death to the persons in that car.

Additional fire and theft cover adds basic protection for your own vehicle. It covers any loss or damage incurred due to theft or an accidental fire.

Comprehensive insurance gives you the best coverage among all three. Apart from covering third party liabilities, thefts and accidental fires of your own car, it also covers all damages to your car in the case of an accident, and the damage/ loss of property in your own car. Injuries, death and other bodily harm caused to you and your passengers are also covered.

Premium rates for these insurance policies are governed by the Bank Negara Malaysia along with the General Insurance Association of Malaysia. These rates change on a yearly basis.

Additional cover can be obtained depending on individual specifications, and may cover your car’s wind shield, expensive audio equipment, damage caused by civil unrest and others.

Factors Affecting Premiums

The factors affecting the base premium of car insurance are Location, Total Insured Value of a car (depends on market value) and Cubic Capacity of a car. The pricing of premiums is mostly tariffed by the Bank Negara Malaysia and the General Insurance Association of Malaysia.

Drivers have access to No-Claim Discount if the driver has not claimed from their policy for previous years. This discount rate is regulated by the Bank Negara Malaysia and the General Insurance Association of Malaysia. No-claim discounts can reduce premium amounts by up to 50 percent.

There are factors known as Loading that will increase the premium needed for insurance. These are factors that influence the risk an insurance company has for a car.

Optional coverage can be purchased with the car insurance to better protect you. These some of these are included in comprehensive coverage while others are purchased on.

Insurance companies may incur additional Loading from a driver’s history to compensate for the risk borne by them.

General Limits

Generally major insurance companies only issue policies to cars of less than 15 years of age and of a minimum value of RM10,000. Those exceed these two factors will be considered too high risk to insure. To get car insurance that fits into the two areas, the best way is to go through government linked insurance agents such as MYEG and Pos Malaysia.