You probably know what auto insurance is and how it works, but do you know the different auto insurance coverage types available in Malaysia? If you’re shopping for car insurance, understanding the different car insurance types and their policy coverages is a significant step in getting the best policy suited for your needs. Here are the available auto insurance coverages available in Malaysia, how they work, and what they cover.
What Type Of Auto Insurance Coverage Are Available In Malaysia?
If you own a car in Malaysia, it’s mandatory under the Road Transport Act 1987 to buy auto insurance before you can drive the car on public roads. However, the coverage you purchase is left to you. In Malaysia, there are three types of auto insurance available for consumers. These policies range from the most basic protection to the one that provides holistic protection to its driver. They include:
- Third party policy
- Third party fire and theft policy
- Comprehensive policy
Third Party Policy
A Third Party policy protects you against any injuries or deaths caused to the third party, i.e., the other driver. This policy also covers for loss or damage to the third party property caused by you. This coverage offers the least level of protection to you in case of an accident. This type of coverage does not allow you to claim any damages to your own vehicle. This policy is also the minimum level of coverage you need in order to renew your road tax and legally drive on public roads in Malaysia. Drivers who do seek this type of coverage are those whose vehicles are old or no longer under any financing arrangement.
Third Party, Fire and Theft Policy
A Third Party, Fire, and Theft policy is more expensive than a Third Party policy.
The policy protects you (i.e., the driver) against claims by a third party i.e. the other driver, be it bodily injuries or death. Third Party, Fire and Theft policy also protects you against third-party property loss or damage caused by your vehicle to the other driver. This policy is basically the same as a Third Party Cover, just with the additional cover of damages or loss from fire and theft of your vehicle.
A Comprehensive Auto Insurance policy covers a wider range of protection than the previously discussed policies. It provides protection to the first party: you, the driver, and the third party, which is everyone else. With this type of policy, you ultimately enjoy the same protection as in a Third Party, Fire, and Theft policy, but with the additional cover for damages to your own vehicle, which is not just limited to fire and theft alone.
In the auto insurance business, the normal practice for theft or total loss claims is to reimburse the policyholder based on the car’s market value at the time of loss. Some insurers, however, compensate the policyholder based on an agreed vehicle value stated in advance in an agreement with the policyholder rather than the current market value.
If you need auto insurance, it is wise to study different insurance companies and policies first and get quotes from them. You can easily do this at Fincrew insurance. They help you compare and get the best auto insurance deals that are customized for you.