We spoke to 5 insurance and takaful agents from our monthly Agent Spotlight columns to find out what they think are the most common mistakes Malaysians generally make when it comes to insurance. This is what they had to say.

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7 Ways to Save on Insurance Cost

1. The sooner, the better

We always advise to our readers to get insured as soon as possible especially when it comes to health and life insurance. Purchasing these policies at a young age when your risk at being diagnosed with a disease is lower, means you are entitled to a lower premium. And once you have already bought your insurance, your company can no longer add exclusions to your policy for any illness that you may be diagnosed with later, while being insured by them. Thus, you will always get the best of your insurance without having to pay more.

The longer you wait, the more you will have to pay.

2. Get your discount

Some companies give discounts if you purchased more than one policy from them. So if you are planning to buy health insurance for you and your wife or parents for instance, you should buy from the same company. When you are searching for the right policy, make sure that you ask the agent if you will be getting a discount for multiple purchases. Buying multiple policies from the same company not only save you money, but it will also help save you the time and trouble of having to pay your premium to more than one company.

3. Only get what you need

Avoid wastages and over-insurance.  Only get what caters to your needs. Always do your own research and  determine the type and how much coverage you actually need. If you are covered under your company’s employee benefits, find out exactly what is covered to avoid duplicate coverage if you also have a personal health plan. You don’t have to pay more than what you need.

If you are buying motor insurance for your car, take note of the sum insured. Is the sum insured correct or is the amount much higher than the actual value of your car? Over-insurance means higher premium for you. Or worse, trouble when you file a claim. If the sum insured is too high, the insurance company will investigate for fraud.

You can always check your value of the car for FREE on the government website: https://www.mycarinfo.com.my/MarketValue

4. Make comparison

Shop around before deciding on a policy that is right for you. However, be advised that in finding the right policy, cheapest doesn’t necessarily mean best. So start with knowing what you need, then identify the policies from different companies that offer this and compare their prices. This is no doubt the best way for you to save on insurance. With the coming implementation of motor de-tariffication in Malaysia in July 2017, we highly advise our readers to speak to their agents and make comparison in motor premium from various companies as we may start seeing big variance in prices.

When making comparison, make sure you are comparing the same type and amount of coverage.

5. Take advantage of renewal bonus or no claims rewards

Many insurance companies offer you reward or bonuses when you renew or when you have not made any claim during the previous coverage period. When you compare premium, keep a look out for these benefits. Below some examples.

Life and Medical Insurance

Syarikat Takaful Malaysia’s takaful medical plan, myHealth Protector, offers a 15% cash back if you have not made a claim in the previous year. While Allianz Medical Insurance MediSafe Inifinte offers you a “No Claims Reward” which increases your hospital room & board benefits if you have not made any claims for a certain period of time.

General Motor Insurance

Many are familiar with the Non Claims Discount for motor insurance. This discount is given if no claim has been made for the period of 12 months of the coverage. If you have made a claim, no matter how small, your discount percentage will be reset back to zero. So, you may want to think twice before claiming from your insurance company if you’re involved in a minor car accident that you have caused. Similarly, if you file too many claims, the insurance company will perceive you as a high risk driver and this will greatly affect the insurance price under Motor Detariffication.

Want to learn more about NCD? Watch the video below:

6. Take good care of everything

Avoid claiming from your insurance company unless necessary, such as the example above. Prevent avoidable accidents by carrying out regular car maintenance. Set your house with a fire alarm or distinguisher. The same goes to your health! Stay healthy by eating well, exercise regularly and get enough rest Staying in good shape is definitely a great way for you to get a cheaper life and health insurance.

Reduce your risk, and you will reduce your premium.

7. Find yourself an honest and knowledgeable agent

An honest agent sees himself as someone who is here to help you plan your life and finances better. They will help you find the best insurance plan to cater to your needs and situation. A “salesman” type agent may sell you a policy that will earn him the most commission. Therefore it is important that you speak to several agents before making a purchase and find one who has your interest in mind. If you need to find one who you can trust, try iBanding’s Agent Directory. The agent rating and review system will definitely help you find the best one for you!

iBanding Agent Directory features over 1600 Insurance and Takaful agents from around the country

The post 7 Ways You Can Save on Insurance Cost appeared first on iBanding Making better decisions.

Approximately 100,000 Malaysians are diagnosed with cancer every year. And it is estimated that 1 in every 4 will suffer from the disease by the age of 75 years. These numbers are staggering enough even without looking at the medical inflation rate in the country of 10% every year. Thus we at iBanding are always reminding our readers to seriously consider purchasing a medical and health insurance. If you are considering getting one, here are some dos and don’ts about medical and health insurance that you need to know.

 

The Dos and Don’ts of Medical and Health Insurance

Do: Know exactly what you need

How would you know what you need? Start with your family history and your own pre-existing health conditions. Then look at your lifestyle and habits (hint: do you smoke or drink). Most of us are aware of the risks that we carry, but more often than not we don’t want to think about these things due to their morbid nature. It takes courage to face these issues. But since you have decided that you want to purchase a medical insurance, you might as well be thorough.

 

Do: Company, product & agent comparison

Now that you have identified your needs, start researching products that suit you. Malaysians have this habit of only speaking to one agent (yes the one recommended by their best friend or sister/ brother). Speak to two, three, four agents, or until you find one that you are comfortable with; who offers a policy that best caters to your needs. 

Meet and talk to agents to learn about different insurances.

Do: Know what’s being covered and what’s not

You don’t want to be choosing a medical policy only to find out that it does not cover what you really need. There are restrictions, exclusions and inclusions that you need to understand. In other words, know exactly what the policy covers, and what it does not. Many people end up getting frustrated at the hospital when they realized that their policy does not cover certain costs. And many accuse their agents of being untruthful when selling the policy to them. Ouch.

 

Do: Understand that insurance is “intangible”

Some people still don’t acknowledge the importance of medical and health insurance. They see it as an unnecessary expense. And when things get tough, this expense is usually the first one to get cut. While it is important to buy a plan you can afford, it is most crucial to first understand clearly that insurance is not something you purchase to “enjoy” immediately. But it is a security blanket, like the umbrella we keep in the storeroom in case it rains. We all carry a spare tyre in the trunk of our car, but how often do we ever need it? That does not stop us from taking it with us everywhere we go. Same principle applies. You purchase insurance not for now when you are well and healthy. You purchase insurance to enjoy the benefits when you are ill or hurt.

You carry an umbrella for protection when it rains. While you buy insurance to protect you when you are ill.

Don’t: Rush. Take your time

When you finally found the one plan that best suit you, take time to fully understand the policy before buying it. Sit down with your agent and ask him everything you need to know about the policy. You need to completely understand what medical expenses are covered and what are not covered. Those that are not covered are called Exclusions. Also clearly understand the claim procedures so that you can avoid the unnecessary panic attack during an emergency. Not only you end up with better knowledge about the plan you are about to buy, you can also find out how good and patient your agent is.

 

Don’t: Delay!

Age does not determine one’s health condition. There are a few reasons why you shouldn’t wait for a later age to purchase a medical plan. Medical insurance is much cheaper when you are young compared to when you are older. When you are older, there is a higher chance that you may have diagnosed with some health problems that you need to tell your insurance company. Those health problems will not only increase the cost of your insurance but also may be excluded from your cover. When you are young your medical record is fresh, you can enjoy the lowest price now and even later. Because once you start your medical insurance with one company, they can no longer add exclusions to your policy later.

 

Don’t: Conceal medical history and pre-existing condition

It’s really nothing funny about this. You may think you can get away with hiding important information just so you can get a lower premium. But insurance companies are smarter than you think. If you are found out, not only your claim will be rejected, you may be sued by your insurer for all the pay-outs they have made on your previous claims. Trust us, this is not a risk worth taking.

Please don’t hide any important information about your medical condition.

Don’t: Buy if you’re unsure

Policy too vague? Don’t buy it. Agent giving you a bad vibe? Don’t buy it from him. Don’t have a good feeling about the whole thing? That’s right. Don’t buy it. There are thousands of agents out there, if you are not 100% happy with the one you met, find another. iBanding’s agent directory has a score of fantastic agents you can reach out to. If you are unsure of a plan, be patient and learn more about other plans. There are many insurance companies offering a variety of products. If you are unsure of a plan, move on to the next one. Don’t settle for something just because it is ‘convenient’.

 

Like this article? Read about the common mistakes Malaysians usually make when purchasing medical insurance.

 

 

 

The post The Dos and Don’ts of Medical and Health Insurance appeared first on iBanding Making better decisions.

So what causes your life insurance premium to go UP?

Young vs. Old

1. Age

The fundamental rule here is: the higher the risk, the more costly the premium. For instance, a 21 year old has a lower health risk compared to a 55 year old. And since the premium rates are determined at the time of purchase, it is advisable to purchase them when you are still young. But how young?

If you are a male, it is most likely you will be getting married someday, if not already, and have a family who depends on you. Therefore life insurance becomes a necessity to you. This does not mean that you have to purchase one at the age of 22. But once you are married, it becomes crucial for you to have one, especially if you are the sole breadwinner in the family. Here it becomes not only critical, but it is also a smart move to purchase one as soon as you can, so that you can lower your premium cost.

However, be aware that you have clearly understood your policy and it’s premium rate structure. As it is not uncommon for insurers to increase the premium rate over time. Shop around and compare plans and quotes.

High risk sports and occupation

2. Lifestyle choice and occupation

If you are an adrenaline junkie who jumps off cliffs for fun, you will no doubt pay a higher premium on your life policy. Simply because you are perceived to carry more risk as compared to someone who is not involved in such high-risked activities. Similarly, if your occupation exposes you to risks that may endanger your life, such as a race car driver or a wildlife photographer, you too could be paying a higher insurance premium.

If you have a high risk occupation, it may be smart to shop around before purchasing your life insurance. As some insurers are less stringent than others in treating these high risk occupations and hobbies. But if high-risk sports and activities are your thing, you may just have to put up with the higher premium, if you are not willing to give up your hobbies.

Family medical history

3. Family medical history

One of the information that you have to disclose when purchasing a life insurance is your family medical history. Many chronic illnesses are hereditary, such as cancer, diabetes, and cardiovascular diseases. The insurance company uses your family history to gauge your risk in developing certain health conditions. Therefore, your premium rate will be higher if your family has a history of one or more of these illnesses.

Having to pay higher premium due to your family medical history isn’t something that is within your control. However, having one means that more than anything, you need a life insurance or medical plan urgently. So if you have a family medical history, you should consider purchasing a life plan (if needed) or medical policy while you are still young. This allows you to not only protect yourself at an early age, but also to lower your premium rate.

Smoker vs. Non Smoker

4. Smoking

Smokers pay higher premium than non smokers. The reason for this is because of the many health conditions related to smoking, such as:

• Cancer
• Stroke
• Heart disease
• Hypertension
• Chronic Obstructive Pulmonary Disease (COPD)

Smokers have a higher risk at developing these health issues and generally have a shorter life span than non-smokers. Insurance companies make no distinction between a social smoker or someone who smokes a pack a day. To them, a smoker is a smoker.

Insurance companies recognize a non-smoker as someone who is cigarette-free for at least 12 months. So to be eligible for a lower premium rate as a non-smoker, you need to quit, and stay quit for a whole year. This isn’t easy at all, but we all know the benefits of not smoking. Not only you save on your premium cost, you also save loads on cigarette while preserving your health!

Pre-existing health condition

5. Pre-existing health condition

Pre-existing health condition means any illness that you may have or have had before applying for an insurance plan. For instance if you have survived cancer, or have a history of heart problems, or if you suffer from diabetes. The risks associated with someone with pre-existing condition is much higher, therefore making the premium higher. Also, having a pre-existing health condition makes it harder for you to find an insurer willing to offer a life plan. And because fewer are willing to do so and choices become limited, this too causes premium price to go up.

So again, this is where buying a life insurance at a younger age is beneficial. As the risk of developing health conditions is lower.

Substance abuse

6. Substance abuse

Substances such as alcohol, marijuana and heroin are detrimental to human health. So if you have a history of substance abuse, you will be considered high risk. Insurance companies will assess the seriousness of your history and will price the policy according. If you are still consuming these substances, insurance companies may not be willing to cover you.

Premium rate also depends on the type of life insurance policy. The length of the policy and the coverage amount will increase the premium cost. A 10 year term policy generally will be cheaper than a 40 year term policy. This is because the risk of death occurring during a shorter period of time is lower. Term life policies are usually cheaper than whole life policy. The total coverage amount also determines the premium rate. The higher the coverage amount, the more you will have to pay in premium.

To ensure that you get the best quotes, make sure to take your time and shop around. Life insurance is a long term commitment, so you should find the best one for you. Do not settle with speaking to just one agent, instead talk to several representing different insurance companies. Take your time to do your own researches. If you need to speak to a reliable insurance agent, find one that is nearest to you on this online agent directory. Like our Facebook page too so you can get more tips on how you can save money on insurance.

The post 6 Factors That Increase Your Life Insurance Premium appeared first on iBanding Making better decisions.

What is Motor De-tariffication?

Is the implementation of a risk-based approach in determining the calculation for motor insurance premium. It is being implemented in phases and started in June 2016.

How premium is determined today?

For the past 3 decades, motor insurance premium in Malaysia is controlled by Bank Negara Malaysia based on a tariff structure. To the end consumer like you and I, this means that the price we pay for our motor insurance premium is pretty much the same, no matter which insurance company we buy our motor policy from. This is WHY many of us have never paid attention to which company we buy from. Many of us do not take the time or bother to “shop around” for cheaper price.

What determines premium calculation today:

1. Market value of vehicle
2. Vehicle engine size (cc – cubic centimeters)

A big change is coming and how it will affect us

1. Risk-based premium calculation

The change will be big and it will affect all Malaysians who buy a motor insurance policy. What does risk-based premium calculation mean? It simply means that when determining the price of premium, insurance companies will take into consideration several risk factors, such as:

• Gender of driver
• Age of driver
• Vehicle make and model
• Driver’s place of residence
• Claims history
• Use of vehicle
• Driver’s occupation

The list could be longer and the risk factors may differ from one insurer to another. This means that some insurer may be stricter in determining premium price for their policy while others may be less stringent.

2. Introduction of new products

In the effort to be competitive, insurers are likely to start introducing additional products and/ or add-on covers to the customers. To us consumers, this means more options available to cater for our needs and preferences. However, while these add-on covers are expected to be optional, some companies may include or package them with the basic motor policy.

3. Increase in competition means an increase in professionalism

Knowing that consumers will now have to ‘shop around’ for a company which offers a product and service that suits their needs and budget, insurance companies will need to start competing aggressively among themselves. One way to do this is by offering the end consumer top notch service and professionalism.

But how will this affect premium cost?

This is perhaps what most of us want to know. No one can give a definite answer. However it is good to first understand that one of the reasons why this change is taking place is due to the growing gap between premium collected and claims paid out by the insurers. This has resulted in an unsustainable motor insurance business to the insurers. One thing certain is that premium will now vary among individuals, due to the varying risk factors.

How can we prepare for it?

One thing we shouldn’t do is to wait till one week before the expiry of our motor policy to consider looking for an insurer that offers the right product at the right price for us. Many of us tend to stick to the existing insurer. But with the full implementation of motor de-tariffication, this may no longer be an option. Especially since doing so may cost you a lot of money as oppose to you finding an alternative insurer who offers the same service and coverage at a lower price.

As a preparation, what we can do is to start comparing prices, products, and service level among insurance companies. Some of the factors which we can start to assess are:

• Which companies have a habit of ‘packaging‘ add-on covers with their main policy which may not be necessary to us.
• How much loading (in %) these insurance companies are placing on your premium for additional risks
• Which companies are generally known for professional service. And which are known for unsatisfactory service
• Even more importantly, which companies offer excellent service, in handling issues or a claim 
• Which company pays out the fastest, when you have a claim

This information will help us in shortlisting the insurance companies which we may consider in purchasing our next policy from after the full implementation of motor de-tariffication in June 2017. Hence making it easier for us to do pricing and product comparison.

Annual campaign for the search of Malaysia’s Best Motor Insurance Company

One way iBanding is helping the Malaysian consumers is by offering them a platform where they are able to have their voices heard. Every year, iBanding conducts a survey where the consumers are able to rate their motor insurance company and insurance agent. At the end of the campaign, iBanding will gather all the data and identify the top 3 best insurers. This information helps narrow down the list of insurance companies which we can prioritize in making our comparison. This info will save us time and energy when shopping for the right insurer. As we can safely eliminate insurance companies that have done poorly in the survey.

The participation of the public is crucial in order for all of us to obtain the most accurate, useful and relevant data. So we urge all Malaysian motor policyholders to contribute in this research by answering a few questions concerning your current insurer. Remember, your information will benefit everyone of us!

How you can participate. Click here:

Read more about Malaysia’s Best Motor Insurance survey here.

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What is under-insurance?

In insurance language, under-insurance is a situation where the insured value is lower than the true value of the insured asset such as your car and your home at the time of purchase of insurance. This sounds difficult, but it isn’t and we will present some examples for better understanding.

For instance, under-insurance for a car could mean that you buy insurance cover for the value (Sum Insured) of a Perodua Myvi, although you are driving a BMW. This is financially dangerous, because in case of an accident or theft, you might think that you get paid as much as the Perodua Myvi, but in reality, you will get even less. Below some more specific examples on how under-insurance can hurt you.

What does under-insurance mean in Motor Insurance?

1) In the case of a stolen car

Chong owns a car that at the time of insurance renewal has a market value of RM 50,000. Because he wants to lower his premium cost, he insures the car at RM 30,000. Unfortunately for Chong, his car was stolen soon after. It is obvious that he would not be able to claim for the market value of his car i.e. RM 50,000, because he never insured for that. So there is already a big loss in amount here between the insured value and actual value.

So Chong will only get to claim RM 20,000. Ouch! Do not make that mistake. Insurance is there to protect you, don’t under-insure to save money.

Cheaper does not necessarily mean better!

What’s scary is that many Malaysians are not even aware that they are under-insuring their vehicles. It is a bad practice by some agents in Malaysia who intentionally under-insure you, so that they can offer you the cheapest insurance. You might be happy that it is cheaper, but when you have the accident or theft you feel cheated. This is why we like to remind our readers again and again the importance of having the right insurance agent who has your best interest.

 2) In the case of damage

Siti’s new car has a market value of RM 80,000, she too tries to save a little money and under-insures her car at RM 60,000. 8 months later she met with an accident and had to claim from her comprehensive policy. The amount needed to cover for the damage was RM 10,000. And at the time of the claim, the market value of the car was RM 75,000.

Similar to the example above, because Siti under-insured her car “average clause” applies. Siti will only be getting a pay-out of RM 8,000 instead of the actual loss of RM 10,000. There is a shortfall of RM 2,000 which Siti will need to fork up with her own pocket money.

What does under-insurance mean in property insurance?

The same principle applies, along with the “average clause”. However, the difference in the value of a house and a car can be significant, therefore the financial impact on you can be huge when there is a shortfall. A simple example below:

You insured your home for RM 600,000, when the re-build cost from scratch is RM 900,000. Note:  When you set the sum insured for your house, you look at the re-building cost only and not at the full value of your property, which is house + land. A fire broke out and damaged your home one morning. The repair and replacement (of possessions) cost comes up to RM 300,000. The claims settlement would be as follows:

But what happens when at the time of the claim, the re-building cost of the house has increased to RM 1,000,000? We would be looking at a smaller pay-out then! Over time the re-building cost of your house will increase due to inflation. It will become more expensive to build the same house, because the material has become more expensive. Most people make the mistake of not adjusting their fire insurance to reflect this, this is why under-insurance in fire insurance is common in Malaysia.

According to Valuation and Property Service Department (JPHH), house prices in Malaysia have increased on average 5.4% in 2015. You can get more insight on the latest article on the Global Property Guide.

You do not need to get a property surveyor each year to evaluate your property. A good agent will have the knowledge and skill to make a good estimate by how much your insurance sum need to increase.

What did we learn from these examples?

In all the scenarios above, we could clearly see that there is a big impact in terms of financial loss as a result of under-insurance. If you have been paying for insurance premium for more than a few years, you will know that there isn’t a lot that you can save in premium by lowering your insured value, especially in comparing with the potential amount that you could lose when a claim arises.

What are other risks of Under-Insurance?

You may be thinking, “OK all is not lost, at least I still get some pay-out if not all”. Hold it right there! You get pay-out from your insurance company IF you are lucky. Your insurance company reserves the right to not pay you at all and cancels the policy altogether. Imagine if the under-insured here is your home and that it is destroyed in a fire. The potential loss could go up to hundreds of thousands of ringgit. Do you have that kind of savings to cover the loss?

So you really need to ask yourself if it is worth taking the risk of potentially losing big for a small saving. We say you shouldn’t. It would be, as we said earlier, penny wise pound foolish to do so.

How does iBanding help?

We from iBanding want to help Malaysians get the correct and best insurance cover. This is why we believe a knowledgeable and trustworthy agent is very important. To help you and others find the right agent, we have created an agent directory for Malaysia. Our agent directory aims to list all insurance agent in Malaysia with a 5-star ratings system in place, so that customers can review and rate their agents.

The review and rating will help you see what other customers think of the agent and it will help the agent with high ratings to do well. We are very supportive of agents who provide the best insurance advice to get more customers. Agents that provide bad service or cheat customers, we want to list too, so that others do not fall into their trap.

You cannot find your agent? Check out iBanding’s Insurance Agent Directory.

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This article will look at most of the additional covers that are available in the market. You may find that some insurance companies may offer more options than others. So it is important that you know exactly which covers you want and find the right insurance company that offers them. Additionally, you may check out the car insurance comparison we carried out recently.

Additional Coverage/ Extensions in Motor Insurance Policy

We listed the covers according to what we feel is most important to Malaysian road users.

1) Windscreen Cover

Windscreen cover insures you against damage on your windscreen. The benefit of having this plan is that when there is a claim against your broken windscreen, the insurance company will pay in for the repair/ replacement of your windscreen.

Another advantage is that you will not lose your NCD when you claim against this cover, which is a big deal as NCD represents a big saving for you especially in the long run. In our article on NCD, you can read an example on how having a windscreen cover can be most beneficial to you.

The additional premium can be between 10-15% of the amount insured for windscreen. The amount insured is usually based on the price of the windscreen for your car type/ model. This also means that when there is a claim, the insurance company will pay you up to this ‘insured’ amount.

However, do take note that windscreen cover only protects you for 1 time claim, after you have made a claim the protection is over and you will need to purchase another cover if you want to continue to be insured for windscreen damage. Windscreen cover is linked to your comprehensive plan, so when your comprehensive cover expires, so will your windscreen cover.

We at iBanding highly recommends consumers to take up windscreen cover because windscreens are susceptible to damage and are expensive to replace. Read our article on the steps you need to take when making a windscreen claim and also find out more on NCD.

2) Named Driver

A “Named Driver” is someone who can drive the insured car or motorcycle with the owner’s permission and be covered by the insurance with the same privileges as the owner. In Malaysia, you can put two drivers into your motor policy for free. Any additional driver will cost additional RM 10.

It is important to put in regular users of your motor vehicle in the insurance, because if an unnamed driver gets into an accident, insurance companies will pay out less on the claim. For example, when an accident happens with an unnamed driver behind the wheel, the insurance company reduces the pay-out by RM 300. Paying additional RM 10 for a named driver is small compared to that.

3) All Driver Coverage

This extension is useful for private vehicles registered under a company or an organization (not considered commercial vehicles). This extra coverage will allow any authorized personnel to drive your vehicle and have the same insurance protection extended to them.

The additional premium for this extension is RM 50 per vehicle.

4) Special Perils

This plan insures you against damages due to natural disasters such as flood, earthquakes, landslide, landslip, sinkhole etc. The additional cost for this cover is around 0.5% of your sum insured. This may vary according to insurers.

Fortunately for us, other than floods, Malaysia is not known to have many other natural disasters. Therefore most of us do not even consider to purchase this additional coverage for our vehicles. However, for people who live in flood-prone area, such as in the east coast of Malaysia, you might want to consider this plan if you have the extra money for the additional cost. And we do recommend this especially now with the erratic weather patterns.

You might want to get insured for risks such as flood.

5) Legal Liability

There are two types of Legal Liability Cover for Car Insurance in Malaysia. Both policies are not mandatory in Malaysia, but when you plan to travel with your car into Singapore, it is mandatory to have those two covers in your motor policy. Also, if you are earning extra money as an UBER driver, we highly recommend taking up this extra cover to protect yourself against your UBER passengers.

(i) Legal Liability of Passenger or short LLP-A, LLNP, LLOP

Imagine you are driving your car, suddenly one of your friends sitting in the car wound down his window and threw an empty glass bottle out. The bottle accidentally hit a motorist at the back causing him to lose control of his bike and hit a pavement, causing injury to himself and damaging his motorbike. Hopefully we don’t have reckless friends like this, but if this did happen, you could be sued for causing injury to others. Legal Liability of Passenger protects you from such legal liability, i.e. financial damages if there is such a legal action against you.

The additional premium for this cover is RM 7.50 per car.

(ii) Legal Liability to Passenger or short LLP, LLNP, LLTP

This cover will compensate you in the event that you (or your named drivers) are being sued by your passengers for negligence. For instance, if there has been an accident while you, or your named driver was driving, and this caused injury to your passenger(s). If they proved that the accident was due to your negligence, they could sue you. This plan will compensate you for the financial losses in such events.

The premium for this cover is 25% of Third Party premium.

6) Compensation for Assessed Repair Time (CART)

This plan will pay you for the estimated number of days required to have your car repaired. The number of days is determined by the adjuster’s recommendation of the time required for repair. And NOT the number of days the car is stuck in the workshop. This compensation allows you to pay for a rental car during the time when your car is being repaired. This cover could lessen your inconvenience and burden during such a time. To claim for this you must rent cars only from licensed car rental agency with proof of receipt.

The additional premium cost for CART varies according to insurers. Therefore it really depends on which insurance company you purchase your motor policy from. Some insurers such as Allianz for instance, offers free car for 5-9 days under their Enhanced Road Warrior plan.

7) Car Accessories Cover

If you’ve spent a lot of money accessorizing your car with expensive stereo system, this is the plan for you. Under this plan, you will receive compensation if your accessories get stolen. This plan also covers you if your car accessories are damaged during an accident or an attempted burglary. Stolen tires are not covered under this plan.

The additional premium for this coverage is about 15% of the value of the accessories.

Spent a fortune on the fanciest car audio system?

8) Strike, Riot & Civil Commotion

This insurance plan protects you from damages to your vehicle due to various kinds of strike, riot or civil commotions. So naturally it is not a popular plan in Malaysia. The premium for this coverage is about 0.3% of the sum insured of your vehicle.

This is perhaps the most comprehensive and detailed list of additional covers for motor policy that you can find offered by Malaysian insurance companies. We hope that it has been useful to you in understanding better the additional coverage that is available to help you protect yourself further as a consumer and a road user.

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Understanding NCD and How It Can Help You Save on Motor Insurance Premium

In our previous article on Motor insurance, we covered the basics of this class of insurance where we explained the 3 common types and their coverages. In this article we will be talking about an important component in motor insurance that we all need to understand so that we are able to take full advantage of the benefits offered by our insurance policy. The component that we are referring to here is the Non-Claim Discount in insurance, or better known as NCD.

What is NCD?

Non Claim Discount, as the name suggests, is a discount, or a kind of reward system, awarded to the policy holder during renewal of motor insurance policy if no claims have been made during the previous 12 months of coverage. So what this means is that, if you have not made any claims against your policy during the whole of 12-month period, upon the next motor insurance policy renewal, you are entitled to a discount!

Guide to Buy Car Insurance Online in Malaysia

How much discount?

Discount is great, but how much exactly? Well it depends on the type of vehicle in question. Private vehicles enjoy more discount compared to commercial vehicles and motorcycles. Below is a table that shows the discount rates based on type of vehicle and the period of insurance. This is a fixed rate determined by Persatuan Insurans Am Malaysia (PIAM) and therefore is the same across all insurance companies in Malaysia.

NCD Rates based on Vehicle Types and Period of Insurance

How NCD in insurance works:

To be entitled to this discount, you would need to have at least a 12-month claim-free insurance period, which means that, if you are purchasing a motor insurance for the first time, you will not yet get any discount until you are renewing the policy a year after. In which case, you will be given a 25% discount (presuming that you are renewing for a private car). To further illustrate on NCD, let’s say you still have yet to make any claims after the 2nd year (i.e. no claims for consecutive 24 months), upon your next renewal, you will get a 30% discount.

So what happens when you finally do make a claim? For instance, during your 3rd year, there has been an accident in which you had to claim from your insurance for the cost of repair. In this case, the next time you renew your policy, you will no longer get a discount (discount reverts back to 0% as seen at the top of the table above) and you will need to pay your premium in full. You will be entitled to a discount again if you go on another 12-month claim-free period, and the discount rate will start from 25%.

Some important factors to note regarding NCD:

No-Fault Damage

You will not lose your NCD if claims were made against your policy for accident that was not your fault. For instance, you are involved in an accident which you are not at fault. You can either claim against the other party’s Third Party Policy or against your own Comprehensive Policy for faster claim process and suffer no loss in NCD.

NCD is Transferable

NCD is in fact applied to the policy holder and not to the car insured. Therefore if you have an NCD of 30% and you decided to sell your existing car and purchase a new one, you still retain your NCD (of 30%) which can be transferred to the new car.

However, if you are purchasing a new car, and keeping the existing one, then the new car’s NCD would start with 0% as you are not able to apply the same NCD on both car. We do advise that if you have more than one car, you should transfer the higher NCD to the more expensive (higher market value) car to gain more savings on premium.

Changing of Insurer

In the event you decide to renew your motor insurance policy with a new insurer, your NCD should apply to the new policy provided by this new insurer. NCD is something that is regulated and not set by the insurance company and therefore, it is applicable no matter which insurance company you purchase your motor insurance policy from.

Windscreen Cover

Windscreen policy is an add-on cover to your motor policy. Many people opt to purchase this considering how expensive it is to have a windscreen replaced. If you have windscreen insurance, then the insurance company will pay for any repair or replacement without you losing your NCD. However, if you do not have windscreen insurance and you claim, then you will lose your NCD. Here it makes sense to check what is better for you. A qualified insurance agent can help you with that decision. We will explain further with examples below.

 

How to take advantage of NCD?

Sometimes it is worth paying for the repair cost instead of making a claim against your policy. Doing so will help you retain your NCD. This applies when the repair cost is small and when the savings on your premium cost from your NCD is greater than the repair cost itself. Therefore, it is good to be aware of how much premium you are paying. As well as how much savings in terms of NCD you are getting to allow you to make a better decision. Here are some examples:

If you do not have windscreen cover / insurance:

Example: The repair cost for your windscreen is RM 500. You have 55% NCD that saves you RM600.

Solution: You should not claim against your insurance company, but pay the windscreen repair yourself. When you renew your insurance, you will have saved RM 100. But that isn’t all. You get further savings the following year (if there had not been any claim) since your NCD is retained.

But what if the repair cost is the same as the savings from NCD for that year? We would still suggest that you pay for the repair yourself. Since the savings you will get from NCD is more valuable.

If you have windscreen cover / insurance:

No effect on your NCD. So just inform your insurer and go ahead and repair your windscreen!

Be a smart consumer. Understand your policies well. This can protect your rights as a policy holder, as well as save you money and unnecessary cost. Always have your insurer’s care line stored in your phone. Make use of this service in case you have any doubt or inquiry regarding your policy. Insurance can be complicated and good advice is hard to come by. Should you need to find a trusted agent, our insurance agent directory can help locate one near you.

 

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In the chart below, you can see some of the most common health risks shown with their frequency (how often they happen) and the severity (how much they cost). Understanding the severity of these illnesses is useful, because if an illness is not considered as “severe”, insurance may not be required, as we should be able to easily pay with our own pocket money for it. Whereas if an illness is considered “severe” this usually means that we need to have at least RM 1,000 to RM 10,000 or even more readily available to pay for the cost.

Examples of Severity and Frequency of common health risks

Examples of Severity and Frequency of common health risks:

The type of risks can be numerous and all relate to your health. An example of the most minor risk is such as a common cold. Most often you are able to pay out of your own pocket for a doctor’s visit. However, medication can at times be quite expensive, so in such a case, medical insurance can be very useful as it can cover those costs for you. These kind of illness is pretty common and you could get them often, this makes the frequency for these illnesses high.

The second health risk is accident. This may not be something that happens as often as the common sickness. For example, when you break an arm, have a heart attack or is injured in a car accident. The hospital cost can be quite high therefore you would want to make sure that an insurance covers you for the treatment cost.

The last risk is the most severe: Death. This is a separate category of risk and will fall into Life Insurance. We will describe this in our life insurance article in more detail.

How do I find the best health insurance and what should I buy?

There are two main types of health insurance that you should consider.
1. Medical & Hospitalization Insurance
2. Critical Illness Insurance

There are other types of plans such as the Disability Income and Hospital Income Insurance that we will not be covering here.

What is Medical & Hospitalization Insurance?

This insurance will take care for most of the cost of treatment for illnesses and also accidents. You will get a medical card that serves as proof of coverage and in most cases you do not need to pay anything upfront during treatment, because the hospital will deal directly with the insurance company for payment. If you are employed, most companies offer their employees a medical plan (often called Group Hospitalization Schemes – GHS or GHSI). You should understand the coverage to decide if it is necessary for you to obtain additional plan as a supplement.

What is Critical Illness Insurance?

The second type of medical insurance is what most people in Malaysia do not have and should consider purchasing. This insurance will cover a list of illnesses (also known as dread diseases). Examples are cancer, diabetes, kidney disease, hearth attack etc.

You might wonder why would you need a Critical Illness plan, if you already have a Medical & Hospitalization cover. The reason is the high cost of treatment for these illnesses.

Take cancer for example, your Medical & Hospitalization insurance will only cover hospital and treatment cost of up to a certain limit. Let’s say RM 100,000. This limit is too low for most of the cancer treatments. Insurance companies call this amount “Annual Limit” or “Sum insured”. If this limit is reached, the insurance company will stop paying even though treatment is still on-going.

In reality, cancer treatment can go really high even into the millions. This means that everything above the set limit, you will need to pay on your own. This is where Critical Illness insurance plan becomes a necessity, so that you are covered for those costs above RM 100,000 or your “sum insured”.

To give a better idea of the impact of the exorbitant treatment cost for a critical illness such as cancer, here are some findings from a study carried out by George Institute for Global Health:

Financial impact of treatment cost for cancer as studied by the George Institute for Global Health.

Should everyone buy Critical Illness insurance?

Ideally yes. You don’t want to get into the situation where money becomes the deciding factor of life and death. However, not everyone can afford this insurance plan, and not everyone has the same risk in getting any of the critical illnesses. Speak to a qualified insurance agent, who will go through a list of questionnaire with you in determining if you should or shouldn’t acquire one.

One of the key questions that the agent will ask is your family medical history. This includes if any of your family members have any of the critical illnesses. If yes, then your risk in getting it yourself will be considered as high. Therefore, you should consider purchasing a cover for this known risk.

This concludes our first article describing Medical Insurance. If you have questions, please do not hesitate to contact us or write us a comment. We will be happy to clarify.

Source: https://www.malaysiakini.com/advertorial/318645

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