Many of us make the mistake of assuming we are completely safe by having a motor insurance policy. We couldn’t be more wrong! There are situations where even our comprehensive motor insurance does not cover. So here’s a helpful list of 7 of those circumstances, in descending order of seriousness (in our opinion anyway). Find out how many you didn’t know.
This means damages to your vehicle due to riots and strikes. Though the chances of this happening in Malaysia is slim, we feel that it is worth mentioning anyway. Especially now that there is an apparent rise in the number of demonstrations. If you are worried about your car being damaged this way, ask your agent about an additional coverage that you could purchase just for this type of protection.
Car damaged during riot? Not covered.
This includes your fancy sport rims and state-of-the-art sound system you installed after purchasing your car. If there has been a break-in and these items were stolen, your policy will not compensate you for your loss. Therefore, if you have spent a minor fortune on these items, we suggest you protect them by purchasing an additional cover. We’re sure your agent would be more than happy to assist!
Fancy accessories? Not covered.
Now this is something many Malaysians are unfortunately familiar with. Because it is so common in Malaysia to experience the seasonal flooding, we naturally assume that damages to our vehicle due to flood and rain is covered by our comprehensive policy. Not true. A standard comprehensive policy does not cover this. If your car is damaged due to flood or other natural disasters for that matter, your insurance cover will not be compensating you for the loss. The solution? You guessed it, additional policy that covers special perils.
Damaged due to flood? Also not covered.
This means anyone including your spouse, children, parents or friends. If the car suffered damages when it was driven by someone other than you, your policy will not cover for the damages. You can still get to claim from your insurance company though if you pay an additional RM 400. Or you can purchase what is called the “Named Driver” additional policy for RM10 per named driver per year. This policy extends the same privileges offered to you as the insured to other specified drivers. Why pay RM 400 when you can pay RM 10 right?
Your friend crashed your car? Not covered.
Here’s a scenario. You drive your friends around one day and meet with an accident. Though no one was hurt, one of the friends later decided to sue you for the trauma the accident had caused him. Sadly we all know one friend who is a pain like that. Your insurance policy will not pay for his claims, even if he was really injured! So you are on your own to face your friend and his lawyer. However, there is an additional cover you can purchased called the “Legal Liability to Passenger policy”. This could be useful especially if you often drive people around or have merciless friends.
The other scenario is when your passengers cause damages to others. For example, they open the door at the wrong time and cause a motorcyclist to get injured. A regular comprehensive insurance does not cover you for this. You need to buy an add-on called “Legal Liability against Passengers” to protect yourself in such situations.
Both add-ons are especially useful when you often drive people around, e.g. when you driving for Uber or Grab. And if you are driving to Singapore, it is mandatory to have these add-on covers.
Got sued by your passenger? Not covered.
Not many among us are lucky enough to purchase a car without a hire-purchase loan. But did you know if you totaled your car (i.e. wrecked your car beyond repair) during an accident, even if it wasn’t your fault, your insurance will not be paying off your outstanding loan. What it will do however, is compensate you for the amount equivalent to the market value of your vehicle during the time of loss. This amount is usually much lower than the value of the loan, due to: a) depreciation rate of vehicle, b) bank interest rate.
This is why it is important to pay close attention to the sum insured under your policy. You want to match the amount with your outstanding amount of your car loan. If the sum insured is lower, you might end up paying for a car that you now longer have – yikes! Best advice is to go for the insurer’s Agreed Value offer. It solves all the headaches about market valuation in the event of an accident or total loss.
Car wrecked beyond repair? Not covered.
No way?! Yes sadly this is true. Your motor policy will only compensate against bodily injury and death of the third party, not your own – even if you own a comprehensive cover. If the other party is at fault, their insurance will cover you. But if you caused an accident, and you ended up with 8 broken bones and is hospitalized for 2 months, you better have the money to pay for it, because your car insurance does not cover it. So what can you do?
One of the most important insurance that you should have is health insurance. Your health insurance will cover your injuries, if you are at fault. Unfortunately, health insurance is not mandatory in Malaysia, so that many Malaysians are not covered, because they only buy car insurance.
Injured during an accident? Not covered.
Did some of the listed above surprise you? Are you considering purchasing additional coverage for better protection? Read more about what’s available here. Should you need more information, reach out to your insurance agent for advice. Or if you do not have a professional insurance agent check out our directory for reliable agent near you. Stay safe Malaysia!
Want to know the different types of motor insurance policies available in Malaysia? Read this article!
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