Have you ever wondered what the difference between Takaful and Insurance is? In this article, we will compare and explain the difference between Motor Takaful and Conventional Insurance. To make our comparison more realistic we will use Etiqa’s product to compare. Etiqa offers both Motor Takaful and Motor Insurance.

The Etiqa Motor Takaful (Takaful) and Etiqa Motor Insurance (Conventional) plans are both among the best motor insurance plans available to all Malaysian road users. They are both a comprehensive motor protection plan which covers loss, theft and even damages to cars. The best part is that customers will get a 10% rebate on top of their NCD when they renew either plans online. So, which should you choose? Let us help you understand so that you can decide on which plan suits your need.

It is clear that the Takaful and Conventional plans both serves different purposes to customers. However, we would first like to highlight on many of the similarities between both plans. Some of them include :

• Comprehensive motor insurance

• Coverage for loss, theft or damage protection

• 10% rebate on top of your NCD for online renewals

• Get reimbursed with a value you agree with

• All authorized drivers automatically covered

• 24/7 emergency hotline

• 24-hour roadside assistance

• Third party bodily injury and death

• Third party property loss or damage

• Coverage for loss or damage to vehicle due to accidental fire, theft or accident

• 0% Interest Installment Plan for Maybank Credit Card Holders

Now that you know the similarities between both plans, let us show you some of the differences in the benefits between both these plans so you can have a better understanding. These are the seven differences that will be able to help you decide on which plan suits your needs.

• Shariah compliant plan
  
  The Takaful plan is a Shariah compliant version of insurance while the conventional insurance is not. This is a significant difference for muslim customers in Malaysia as they might choose the Shariah compliant plan as urged by their religious teaching.

• Offers cashback when no claims is made
  
  The Takaful plan offers cashback for zero claims at the end of the policy year whereas the Conventional plan does not. Therefore, a driver who is confident that he or she practices safe and careful driving might be entitled to obtain additional cash benefit by selecting this plan.

• Rental car assistance in the event of an accident

  The Takaful plan offers rental car assistance in the event of an accident and replacement services for tires, battery and more. This benefit might be useful for working customers who need to travel to work on a daily basis as having a mode of transportation is always important to them.

• Free car towing up to 200km.

  The Conventional plan offers free car towing assistance up to 200km. This is a benefit that is not offered by the Takaful plan. This benefit might be useful for drivers who often drive alone and need a mode of assistance in case of an emergency.

• Fast Claim Approval within 30 minutes

  The Conventional plan offers fast claim approval for amounts of up to RM5000 which the Takaful plan does not offer. We believe this benefit will certainly be useful for drivers who are busy and always on the go, as they may only need to wait up to 30 minutes for claim approvals.

• Get 30% cash refund when you drive less
  
  The Conventional plan offers customers cash refund up to 30% for low mileage usage. We believe that this benefit might help customers who rarely use their car to save a lot of money in the long term.

In conclusion, the Takaful plan is a must for people who want a Shariah compliant plan while people can choose the Conventional if a Shariah compliant plan is not a concern to them. In addition, the Takaful  provides cashbacks, when you do not make any claims for accidents during the end of the policy year. However, Conventional does not have this benefit. The good news is, if you do not drive much, the Conventional plan will give you up to 30% cash refund while the Takaful plan does not have this benefit. The 30% cash refund is an important benefit especially for people with a spare car at home that is not driven often.

Besides that, the Conventional plan also provides customers free car towing up to 200km and faster claim approvals. If you are someone who is always busy with work, then this plan would benefit you a lot as your claims will be approved within 30 minutes and you do not have to worry about paying extra for tow service. On the other hand, the Takaful plan provides you with an immediate replacement car and also provides tires and battery replacement services for their customers. This is great especially for people who drive their car to work everyday and cannot afford to wait long until the car is repaired as they do not have a spare car at home.

We hope all this information would have opened your eyes to make a better decision by now. The factors discussed above should help you realise your needs in choosing between the Takaful or Conventional plan.

The Takaful plan is for people who:

• want a Shariah compliant plan

• want claims cashback for safe driving

• need a replacement car after an accident

The Conventional plan is for people who:

• drive less or second car that are not used that often

• travel long distance

• want fast claims processing

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