• Cash-before-Cover regulation - according to Section 141 and regulation 65 of the Act, it is an offence to grant motor insurance cover unless the premium is paid to the insurer or its agents.  Any person who fails to comply with this Section shall be guilty of an offence and shall on conviction be liable to a fine not exceeding RM500,000.
   

• Duty of Disclosure - Section 150 requires that you (as the proposer) to disclose facts about the risk being proposed:
        -  which you know to be relevant to the decision of the insurer:
        - whether to accept or reject the proposal; and
        - what rates and terms to be applied; or
        - which a reasonable person is expected to know to be relevant;
  otherwise the Policy issued to you may not be valid.

  
   

  

Motor Insurers Bureau ( MIB )

• An Authorised Insurer must be a member of MIB.

• Members of MIB make monetary contributions  comprising a part of their motor insurance premium to a common pool.

• The money collected is used to compensate certain injured victims of road accidents.

• MIB is responsible for handling Third Party Bodily injury claims where :
  -  there is no Insurance cover
  -  there is a forgery of cover note or road tax

• This is a social responsibility carried out by Insurers together with the Government.

Authorised Driver

• Anyone can drive your car as long as you give permission or order. Such persons however, must have a valid driving license otherwise your policy will not operate.
• Although anyone can drive your car, you may have to bear the extra Compulsory Excess in the event of a claim,  if the person driving is not a Named Driver.
• Your policy defines Authorised Driver as :
  -  The Insured (i.e yourself); or
  -  any one else who drives with the  permission or on the order of the insured;
     Provided such person has a valid driving license.

  

  
  

Named Drivers - for comprehensive policy only

• Any one can drive your car with your permission as long as they have a valid driving license.
• Should your car be involved in an accident whilst being driven by persons other than yourself, you will have to bear an additional compulsory excess of RM400.
• To avoid bearing the additional RM400 excess, you can name any number of persons who regularly drive your car in your policy.
• Those named in your policy will not have to bear the additional RM400 excess provided they are above 21 years of age and hold a full licence.
• You should not name persons below 21 years old or holders of "L" or "P" licence as they will be subjected to RM400 additional excess anyway, whether or not you name them.
• Additional premium will be charged for each driver named, if above 2 persons including the owner of the vehicle.

No claim discount ( NCD or NCB )

• You are entitled to a No Claim Discount (NCD) as appended below on your renewal premium if :
  -  no claim is made or arises from your policy; and
  -  you have insured your vehicle with the same Insurer for a
     continuous period of 12 months

• The NCD available to Private Car owners are as follows:
  -  after one continuous claim-free year - 25%
  -  after two continuous claim-free year - 30%
  -  after three continuous claim-free year - 38 ^1/3%
  -  after four continuous claim-free year - 45%
  -  after five or more continuous claim-free year - 55% ( maximum )

• you will lose your NCD if there is a claim, irrespective whether the accident is your fault or not and you have to start from 0% again.

• If you decide to change your Insurer on renewal, you can ask your current Insurer to give you an NCD confirmation letter. Your new Insurer, will then allow the confirmed NCD % on your new premium.

Market Value - for Comprehensive policy only

• Your policy defines Market Value as "the value equal to the cost of purchasing a replacement vehicle of the same make, model and age at the time of the loss" and not at the time of purchase.

• In other words, if you were to sell your car just before the accident or theft what price would you get? That price is the market value.

• if there is a dispute to the market value, it will be determined by the local franchise holder.

• if  there is no local franchise holder for the model in dispute, the valuation will be referred to a licensed loss adjuster.

• According to the policy, the valuation of either of these bodies shall be final.

• If you wish to be adequately compensated, you should select a sum insured equivalent to the market value and make the necessary allowance for any anticipated increase or decrease in value during the year.

Policy Excess - for Comprehensive policy only

• Policy Excess is the first portion of a loss covered under Section A which you must bear yourself. (read Endorsement 2 of your policy).
   
  For example, if your policy carries an excess of RM500 and you sustain a loss of RM5,000 then:
  -  you bear the first                 : RM  500
  -  Insurer pays the balance    : RM4,500

• If the loss sustained is say only RM300, then you bear the whole loss yourself and your Insurer bears nothing.

• The Policy Excess is to encourage you to drive carefully as otherwise you have to bear the first portion of every insured loss yourself.

• The amount of Policy Excess to be imposed varies between Insurers but is subject to the upper limits provided by Bank Negara.

• You will be pleased to note that the Policy Excess is not applicable for loss or damage caused by fire, lighting, explosion or theft.

• In addition to the Policy Excess, you may also have to bear a Compulsory Excess of RM400 for certain categories of drivers.

Legal Liability to Passengers

• The Road Transport Act 1987 does not make it compulsory for you as a Private Car owner, to cover your liability towards non-fare paying passengers.
• Because of this Road Transport Act 1987, Private Car policies in Malaysia usually excludes Legal Liability to Passengers.
• However, this does not mean that an injured passenger of a Private Car cannot successfully sue the negligent driver.
• In view of this possibility, you might want to consider buying Legal Liability to Passenger (LLP).
• LLP extension is available to both comprehensive and Third Party policies subject to additional premium.
• LLP extension does not however, cover liability towards fare paying passengers because as a Private Car owner, you should not charge your passengers fares like a bus or a taxi.
• Please note that LLP cover is compulsory in SINGAPORE according to their law. So if you wish to take your car there, make sure you buy LLP.

Additional perils - for Comprehensive policy only

• If  you feel that your Comprehensive policy does not give you the complete coverage that you desire, you may opt to buy additional cover by paying a certain additional premium for the following :
  -  Strikes, Riot and Civil Commotion
  -  Floods
  -  Falling tree or branches on vehicle
  -  Legal Liability to Passengers
  -  Thailand or Kalimantan cover
  -  Windscreen
  -  Accessories
  -  Named Drivers
  -  Etc.

• There are many more Additional Benefits available. For more information, please check with us.

Accessories Cover - for Comprehensive policy only

Windscreen Cover

• The advantage of buying this additional cover is that you can claim for breakage to the windscreen or any glass window of your car without losing your NCD or having to bear an Excess.
• You have to pay additional premium for this cover.
• The additional premium would depend on how much you want to cover your windscreen.  RM500 ? RM750 ? RM1,000 ?, etc.  You decide.
• This extension not only cover damages to your front windscreen but also the back and all the glass windows of your car.
• Please note that this extension is specifically design to cover breakage of glass windows only. If other parts of your car are damaged at the same time, such loss would be covered under Section A as usual. In such a case, you will lose your NCD and also have to bear the excess;

Types Of Cover Available

1. 'Act' only - the cover required by the Act.
2. Third Party only - Act plus third party property damage.
3. Third Party, Fire and Theft - third party plus own damage as a result of fire or theft.
4. Comprehensive - third party, fire and theft plus other own damage specified in the policy.

As there are various types of motor vehicles and each type involves differing risk exposures, the following classification is used:-

1. private cars
2. commercial vehicles
3. motorcycles
4. motor trade
5. special types.

Commercial Motor Insurance
 
Commercial vehicles represent many different types of risk, the main categories being:

1. goods carrying vehicles;
2. passenger carrying vehicles;
3. vehicles of special construction;
4. agricultural and forestry vehicles; and
5. fleets.

WHEN AN ACCIDENT OCCURS

• Report to the Police within 24 hours.
• Notify your Insurer as soon as possible.
• Send your damaged vehicle to your Insurer's panel of authorised workshop.  Never allow anyone to tow your vehicle without your permission or before confirming it is your authorised workshop tow truck.
• Don't leave your car unattended without reasonable precautions being taken to ensure its safety after an accident.