There are many important considerations when it comes to buying a vehicle. Insurance is one of them. Read these important points to note when it comes to buying motor insurance:
Insured Value/ Sum Insured
You need to protect your interest by purchasing a motor insurance to ensure that your vehicle is adequately insured so that you will receive the claim amount in the event of loss or damage. For a new vehicle, the insured value is the purchase price. For other vehicles, the insured value is the market value of the vehicle when you apply for insurance policy.
It is important to insure your vehicle for its exact amount to prevent the following circumstances: Under-insurance - If you insure your vehicle at a lower sum than its market value, you are considered as self-insured for the difference, i.e. in the event of loss / damage, you will only be partially compensated (up to the proportion of insurance) by your insurance company.
Over-insurance - Should you insure your vehicle at a higher sum than its market value, the maximum compensation you will receive is the market value of the vehicle as the policy owner cannot 'profit' from a motor vehicle claim. Therefore, you would have paid higher premiums for nothing.
Duty of Disclosure
Disclose all material facts fully, including previous accidents (if any), modifications to engines, etc. When in doubt as to whether a fact is relevant or not, ask your insurance company.
By failing to reveal any material facts, your insurance company may refuse to pay your claim or any claim made by a third party against you. In such cases, you are personally liable for such claims.
The price of motor insurance depends on the type of policy you select. The insurance premium charged by your insurance company is the standard minimum rate in accordance with the Motor Tariff.You can compute the standard premium charged from the premium calculator here.
In addition to the standard minimum rate, your insurance company may impose additional premiums known as loadings to the premium payable in view of higher risk factors involved such as age of vehicle and claims experience. Loadings are governed by Bank Negara Malaysia (BNM) and no insurance company may charge loadings higher than the levels permitted by BNM.
Reward schemes such as no-claim-discount (NCD) can also let you save money by ferent NCD rates applicable for different reducing your premiums. There are diflasses of vehicles. For a private car, the scale of NCD ranges from 25% to 55% as provided in the policy.
Vehicle owners must ensure that they:
-Provide a copy of their vehicle registration card to their insurance company/takaful operator/agent at the point of purchase of motor insurance/takaful cover;
-Receive the confirmation of successful transmission of their cover note information to JPJ from their insurance company/takaful operator/agent prior to road tax renewal.
-Contact their insurance company/takaful operator/agent for assistance in the event they face difficulties in road tax renewal.