Is your car insured?

Under the Road Transport Act 1987, it is mandatory for motorists to insure their car and other vehicles against damage and/or third-party risk. On top of that, without it, you cannot tax your car and could be fined or disqualified from driving.



Although it is called a car insurance policy, not only will it protect your car in the event that you get into an accident. It is also about protecting you from personal liability.


With a car insurance:

  • You are protecting one of your biggest investments – your car.
  • You are financially ready in case you are providing damage to third parties.
  • Depending on the plan you are paying for, your medical bills are also covered.
  • You are protected against damages caused by people who do not have an insurance of their own.
  • You can drive with a peace of mind knowing that you are covered every time you get your hands on the wheels.


While your premium is based on a number of factors, some insurance needs are different. And if your car is particularly unusual, you might need a specialist policy. Thus, it is important to find an insurance plan that best suits your financial and practical needs.


Malaysians now have more choices in terms of motor insurance products, thanks to the flexible pricing for insurance products as per announced by Bank Negara Malaysia (BNM) in April this year. Motor insurance tariff is now further liberalised.


Starting July 1 this year, individual insurers and takaful operators have the flexibility to determine premium rates for motor comprehensive and motor third-party fire and theft products. The premium for motor third party products, however, will continue to be determined by tariffs.


According to Jessica Chew, Assistant Governor of BNM, the premium rates now will be determined by various factors including safety and security features of the vehicle, duration of the vehicle on the road, the individuals driving experience and traffic offences on record and geographical location of the vehicle.


This is in addition to the usual factors considered such as sum insured, cubic capacity of the vehicle engine, the age of the vehicle and driver.


With the liberalisation:

  • The same individual would be assessed differently by different insurers, in contrast to the current premium calculation that is based on the sum insured and model of the vehicle, plus limited premium loading based on the driver’s age and accident record, minus the no claim discount of up to 55%.
  • The tariff would gradually move towards more equitable pricing, which would consider broader risk factors, and reduce cross-subsidisation across business classes and risk groups.
  • It would spur innovation as insurers would have greater flexibility in product offerings, while also improving service quality due to competition.
  • It would incentivise good risk management and encourage safe driving behaviour among consumers, as these factors would also affect the premium rates offered.


We all have regrets and moments where we suddenly realise we could have saved millions by doing the right thing. It really does not pay to drive a car without proper insurance and relevant documentation.


Note that no insurance policy comes without an asterisk mark. This means that making sure you understand the conditions attached and the major exclusions from your car insurance policy is very important.


This public service reminder is brought to you by MUV. We want the best for you. Whether it is a brand new or a used car, comply with the law and get it insured.



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