Car Insurance in Malaysia: The Basics and All You Need to Know

Car Insurance in Malaysia - The Basics and All You Need to Know
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Regardless of whether you already own a car or not, it is essential for you to know about car insurance. Trust us; having even the basic knowledge of it is going to be beneficial for you in the long run.

All cars, without exception, need to have valid insurance. Without valid insurance, it is not allowed on the road. If you drive without insurance, prepare yourself in dealing with the higher authorities.

Not only is driving without car insurance dangerous, but you’ll also have to pay extra in paying traffic summons. This also applies to those who do not own a road tax for their vehicles. So, why take the risk? Just apply for both car insurance and road tax, and you won’t have to go through any of the mentioned problems.

In today’s article, we will be informing you of everything you need to know about car insurance in Malaysia. Continue reading to find out more!

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What is Car Insurance?

What is Car Insurance

Car insurance is a type of policy contract signed between the insurance company and you. This contract is designed to financially protect you against any risk of being involved in a road accident or theft.

Hence, car insurance can prevent people from having to pay a lump sum of money for physical damages and repair costs.

Reasons to Get a Car Insurance

Reasons to Get a Car Insurance

Some might think that applying for car insurance is not mandatory in Malaysia, and that is where they’re completely wrong! According to the Road Transport Act 1987, all car owners in Malaysia must own a valid road tax and car insurance. Car owners need to renew these two every year.

Besides the law, you should also get car insurance because it covers a lot of costs. If anything happens to your vehicle, whether it be a road accident or theft, your car insurance will come in handy. Your insurance policy will help in covering the costs of the repairs needed or even replacement.

As a matter of fact, in 2016 alone, there were a total of 521,466 road accidents and 7,152 of which were fatal. The Malaysian Institute Road Safety Research (MIROS) officially reported this. Hence, we believe that this data is a good enough reason for one to buy a suitable insurance policy.

What Are the Different Types of Car Insurance in Malaysia?

In Malaysia, there are three types of car insurance. Each has its own purpose, and it’s crucial to know the differences. Here are the three types of car insurance in Malaysia:

  • Third-Party Cover
    • This is the most basic car insurance, and it is compulsory for all car owners to have it. Since it is basic, it is the cheapest option among the three types. Still, one of the downsides is it doesn’t cover the damages of your vehicle and your own injuries.
    • Instead, as its name suggests, it only covers damage done to the third-party. To put it simply, it covers the costs of repairs and damages for the other car involved in an accident. Thus, this saves you from forking out a large amount of money to pay for the damages.
  • Third-Party Fire and Theft Cover
    • The purpose of this insurance is similar to Third-Party Cover. However, this insurance is different as it covers the damage of your vehicle caused by theft or fire. Bear in mind that it only works for incidents that are accidental.
  • Comprehensive Cover
    • Comprehensive Cover covers a broader range of damages compared to the other types. With this insurance, car owners are entitled to claim repair costs for their own vehicles. You can claim for damage by theft or fire as well.
    • Those who own expensive cars or are not able to afford to replace their vehicle are advised to buy this type of insurance. Here’s a table for you to understand better:
Third-Party CoverThird-Party Fire and Theft CoverComprehensive Cover
Damage to Properties of Other PartiesYESYESYES
Other Parties’ Death or InjuryYESYESYES
Own Vehicle’s Damage during Car AccidentNONOYES
Damage or Loss to Own Vehicle by Theft or FireNOYESYES
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What does My Car Insurance NOT Cover?

What Other Add-Ons are Available for Car Insurance

Before buying car insurance, it is vital to bear in mind that it does not cover everything literally. First, you should read the terms and conditions carefully. Here is a list of what your car insurance does not cover in Malaysia:

  • Your own bodily or death injury due to road accident;
  • Stolen or damaged non-factory fitted car accessories (unless stated otherwise);
  • Your liability for claims from passengers;
  • Damages due to natural disasters (for example typhoon, landslide, flood); and
  • Consequential loss, depreciation, wear and tear, mechanical or electrical breakdown failures or breakages.

What Other Add-Ons are Available for Car Insurance?

What Other Add-Ons are Available for Car Insurance

Apart from the standard coverage, you can also request your insurers to put in additional benefits and extra cover part. Here are other add-ons which you can request to include:

  • Convulsions of nature such as flood, windstorm, rainstorm, typhoon, hurricane, volcanic eruption, earthquake, landslide/landslip, subsidence or sinking of the soil/earth;
  • Breakage of glass in windows or windscreens;
  • Civil, riot or strike commotion;
  • Tuition and testing purposes;
  • Extra named driver;
  • Extension for private car policies provided to a company of businesses only for all drivers;
  • Liability of passenger;
  • Liability of passengers for negligence acts; and 
  • Additional uses of business.
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How Long is the Period for the Cover?

The insurance runs typically for about 12 months. It is valid from the time of purchase or the concurred time of commencement until its expiry date. The cover period will be printed explicitly in related documents and the Policy Schedule.

Who are the Car Insurance Providers in Malaysia?

Who are the Car Insurance Providers in Malaysia

In total, there are 32 car insurance providers available here in Malaysia. Thus, if you’d like to buy car insurance, you may visit these providers’ websites. You can also go to your nearest post office in Malaysia to buy your road tax or car insurance. Here is a list of all the providers:

  • ACE Jerneh Comprehensive Motor Insurance
  • AIA Comprehensive Private Car Insurance
  • AIG Comprehensive Motor Insurance
  • AXA Affin Comprehensive Motor Insurance
  • AXA Affin SmartDrive
  • Allianz Comprehensive Motor Insurance
  • AmGeneral Private Motor Insurance
  • Berjaya Sompo Private Motor Insurance
  • CIMB Motor Insurance
  • Citibank SmartDrive
  • Easy by RHB Easy-Insurance Kasih Motor
  • Etiqa Comprehensive Private Car Takaful
  • HSBC Comprehensive Car Insurance
  • Hong Leong Comprehensive Motor Insurance
  • IKHLAS Comprehensive Commercial Vehicle Insurance Takaful
  • IKHLAS Comprehensive Private CarKurnia Comprehensive Motor Insurance Takaful
  • Liberty Comprehensive AutoStar
  • Lonpac Comprehensive Private Vehicle
  • MAA Takaful Comprehensive Motor Coverage
  • MPI Generali Comprehensive Private Car Insurance
  • MSIG Comprehensive Motor Insurance
  • Maybank Comprehensive eMotor Takaful
  • Malaysia Comprehensive myMotor Takaful
  • Overseas Assurance Comprehensive Motor Insurance
  • Pacific Comprehensive Motor Insurance
  • Pacific and Orient Comprehensive Motor Insurance
  • Progressive Comprehensive Motor Insurance
  • QBE Private Car Comprehensive Insurance
  • RHB Comprehensive Private Car Insurance
  • Tokio Marine Comprehensive Motor Insurance
  • Zurich Comprehensive Motor Insurance

How do I Make a Claim after a Theft or Car Accident Has Occurred?

  1. Report the incident to your respective insurance company as soon as possible. After notifying your insurer, they will then inform you of what to do next. They can also suggest which workshop you should send your car to in case it needs any repairs.
  2. Make sure to make a police report as soon as possible. Insurance companies will not be able to process your claim without a police report and the original copy of the investigation results.
  3. After that, ensure that you gather as much evidence as you can at the scene of the incident. These include photos of damaged vehicles, car plate numbers of both parties and the licences of parties involved.
  4. It’s vital to keep in mind that you will need to compile a few documents for an insurance claim. The documents required are as follow:
  • Police Report (Original Copy)
  • Investigation Result by Police (Original Copy)
  • Report Form for Motor Accident
  • Claim Form (from respective Insurance Company)
  • Identification Card of the Driver
  • Identification Card of the Policy Holder
  • Bill of Repair Work

5. Once you have all the required documents, submit them to your panel workshop or insurer.

Well, there you have it, everyone! We’ve written down the basics and everything that you need to know when it comes to car insurance. Before you decide to buy one, make sure you do thorough research beforehand.

Each provider has different terms and conditions, so it’s important for you to read all of them carefully. Remember – accidents can occur anywhere and at any time.

So, to avoid any unwanted situations, apply for car insurance.

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