What you need to know when making a Third Party Claim

This is Part 5 of our Accident 101 Blog series. If you haven’t read the first four articles, you might want to check those out too.

1 – What to do at the scene of an accident

2 – Don’t fall victim to tow truck scam

3 – At the police station

4 – Making a car insurance claim

In our previous article, we covered the types of claims you can make against your own insurance company when you own a comprehensive cover. In this article, we will be talking about third party claim. It is often written short as TP or TP claim.

 

Who is this third party we are always talking about?

Third party simply means the other party that is involved in the accident. In Malaysia, every motorized vehicle is required to have at least a Third Party insurance policy. This policy covers you against third party claims for injuries or death caused to them during an accident. It also covers against losses or damages to the third party’s property caused by your vehicle.

Read more about the different types of policies here or watch the video below to understand the different types of policies and their coverage. 

 

When can a Third Party claim be made?

A Third Party claim is filed when you have been in an accident that was not your fault where the other party needs to pay for your damages. The other party will have at least TP insurance to pay for:

  1. your bodily injury or death
  2. your property (if his car ran into your house/ shop) and car.

If the other party is at fault, you do not lose your No-Claim Discount (NCD), as you will not be filing against your policy.

What are your rights as a Third Party policy owner?

Let’s understand your rights if you own a TP policy and what kind of protection you are entitled to. We will look at two scenarios:

 

Scenario 1 – Accident was your fault

Example: You have accidentally knocked into someone else’s vehicle, causing damages to the car.

In such a case, the third party has the right to make a third party claim against you. Depending on the type of policy they have, they will either claim it from your insurance company directly or have their insurer act on their behalf.

You will need to go through the normal process of filing a police report and informing your insurer about the accident. You do not need to be concerned with the claim that the other party will be making against your insurance company. Your insurance company will be taking care of the matter and reach out to you if they needed more information.

Because the accident was your fault, you will need to pay for your own damages since you only own a TP policy. This is the limitation of a third party policy. It offers the most basic coverage which is why it costs the lowest compared to other policy types.

 

Scenario 2 – Accident was NOT your fault

Example: While at an intersection, a car rammed into yours from behind due to brake failures. Causing severe damages to your car and injuries to you.

Same as above, you will first need to file for a police report within 24 hours of the incident. You then need to inform your insurance company of the accident. However, as a third party policyholder, you cannot claim against your insurance company. You need to file a claim against the other person’s insurance company. Furthermore, you are also unable to have your insurance company act on your behalf to make the necessary claims against the third party’s insurance company.

Unlike a comprehensive motor policy, you can file a claim with your own insurance company and they will help you handle the claim. They will even start the repair for you without you having to pay for anything.

When you only have a TP policy, you will need to pay for your repair first and then file the TP claim against the other party. This can take weeks or months before you get your money back. The process is long as all documents need to be submitted by both parties and their insurance companies need to agree on the repair value.

So this is where it gets a little complicated for you. When you only have Third Party policy, it is especially important to have a great insurance agent. He will help you with all the steps needed to file a claim against the other person’s insurance company.

 

Finding out the insurance company of a third party

In the past, it was very difficult to find out the insurance company of the other party. But this is no longer the case today.

MyCarInfo offers a free service that allows the public to find the insurer of any vehicle. It is called i-Search.

 

Procedure in making a third party claim:

1) After the accident make a police report within 24 hours

2) Very important! Send your car to the panel workshop of the other parties insurance company

3) Appoint your own Independent Licensed Adjuster to evaluate the cost of the damages to your vehicle. The adjuster will create a report for you

  • An independent licensed Loss Adjuster will prepare a report for you about the vehicle damages. Also the adjuster will estimate the time you are not able to use your vehicle. This is called “Loss of Use” or CART (Compensation for the Actual Repair Time) and you will get some money for it to cover that loss (see below). The report will take about seven to fourteen days and you will need to pay the cost upfront. You can hire a Loss Adjuster directly or through the workshop. 

4) Send the documents to the Third Party Insurance Company

  • While your car is being repaired, compile the following documents and send them via registered mail to the other party’s insurer. You will have to pay for the repair cost first, and seek reimbursement from the other party’s insurance company.

 

Documents needed:

  • Original copy of the police report made by you
  • The Keputusan report issued by the police department
  • Copy of your NRIC
  • Copy of your driver’s license
  • Car registration card
  • Adjuster report including bill of repair cost for your car (or your damaged property)
  • Photo if any, of the damaged car (or property)

Optional 5) In very severe cases, where a lot of money is involved, it is advisable to hire a lawyer to act on your behalf in claiming from the TP insurance company.

 

Conclusion

These 4-5 steps describe the general procedure to file a third party claim in Malaysia. As of October 2016, Malaysia has over 31 insurance companies that sell motor insurance in Malaysia. Therefore it is best to call the TP insurance company to find out what documents are required, because some companies require more documents. A good insurance agent is especially important when you buy TP insurance. This is because you are on your own when an accident happens so having a reliable agent can help ease the trouble. The best insurance agents have plenty of experience and will guide you step by step to get your vehicles fixed and damages paid. If you are in search for an agent, check out our Insurance Agent Directory, where you can find the best agent near you. If you have questions or comments, please feel free to contact us under [email protected].

 

Loss of use or CART

You have the right to claim for Compensation for the Actual Repair Time (CART). Which means that the TP insurance company will compensate you for the loss of use of your car. It is estimated based on the number of days to have your car repaired. Below is the daily CART gauge outlined by Persatuan Insurans Am Malaysia (PIAM):

Important!! Loss of use is calculated based on the days where all documents are completely submitted and approval from insurer to repair is obtained. Not when the vehicle is stationary in workshop after accident.

 Compensation for the Actual Repair Time