This is a guest post by Jacquelyn. In this article, she will show you the simple truth about insuring your vehicle in Malaysia. You will appreciate what she is going to tell you especially if you are a female driver.
I have something to confess and that is being somewhat ignorant about car insurance or motor insurance. My spouse has been handling this part from the very beginning and I actually never bothered to find out what it means to have third-party motor insurance or comprehensive insurance. What is obvious to me though is that third-party insurance is cheaper and applies to old vehicles that are no longer under hire-purchase.
When you opt for third-party insurance, the ‘first-party’ is you, the ‘second-party’ is the insurance company and the ‘third-party’ is other people or anybody else. Third-party motor insurance only covers third-party damages and none for the first-party. Hence you pay a cheaper premium whereas if you opt for a comprehensive coverage which is more expensive, it will cover damage or loss to your vehicle and to third-parties as well.
Normally, people whose cars are old or no longer under hire-purchase would choose to buy third-party insurance or motor policy. But having an old car does not mean you can easily get third-party insurance. In fact, it would prove difficult especially if your car is already above 15 years old. Old cars are perceived to be more prone to accidents and overall, third-party motor insurance does not contribute much to the profit margins of insurance companies.
Personal Money magazine (March 2011 issue) published a quote by a spokesperson from PIAM (Persatuan Insurans Am Malaysia or General Insurance Association of Malaysia) who said “The increase in road accidents and claims cost per accident make third-party motor insurance highly unprofitable for insurers.” Another dilemma faced by insurance companies is the difficulty in valuing and reinstating old vehicles.
If you wish to go ahead and buy third-party insurance, you may have to pay a ‘premium load’ which is an extra amount added to the insurance premium. In addition, do not be surprise if you are also required to get another type of insurance coverage like personal insurance in order to get the third-party motor policy for your car.
Melinda Ngew, CEO of Automobile Association of Malaysia mentioned to Personal Money magazine (March 2011 issue), “most insurance companies will not offer third-party coverage for an older vehicle unless the car owner acquires another type of insurance coverage.” To help your chances of getting approved, stick to one insurance company for your motor and non-motor policies, do not switch around and maintain a good track record all around.
If your applications have been rejected by a few insurance companies already, you may approach the Malaysian Motor Insurance Pool (MMIP). The MMIP was established by the general insurance industry in 1992 to assist those that have been rejected by other insurance companies. You can enquire about the MMIP policies from either Uni Asia General Insurance Bhd or Multi-Purpose Insurance Bhd or at any of the Pos Malaysia outlets nationwide.
While ‘third-party insurance’ and ‘comprehensive insurance’ are the two most common motor insurance, I found out that there are other types available as well i.e. ‘third-party, fire & theft’ and ‘act-only.’ However, in order to renew your road tax, the compulsory minimum requirement is having third-party insurance.