The Question Of Car Insurance

A contractor, before digging up the road to lay cables, must first purchase public liability insurance. Likewise, although many are unaware, a car should possess insurance, either be it 3rd Party or comprehensive (1st Party).

Without insurance, the “road tax” simply cannot be issued.

Failure to provide insurance contravenes Section 90 (1) of the Road Transport Ordinance ’87. In case you wish to know, you could

1) Be fined up to RM1000.

2) Jailed for 3 months or both

3) Your license can be suspended for 12 months.

Recently in Malaysia, there was a “hue and cry” over 3rd party insurance problem from old cars more than 10 years old.

The problem now appears to be solved. Bank Negara it seems is reviewing the rate to come up with a “premium” acceptable to all.

For readers who know nothing much about car insurance it’s simple this. New cars, mostly under Hire Purchase (H.P.) ideally need 1st party insurance.

Should the above vehicle be stolen or involved in an accident, the insurance company is liable to “pay for it” or “compensate” the loss.

Should your car be involved in an accident, you should be able to claim for your repairs from your insurance company.

Likewise, if another party or “person” in involved in an accident with your car, then the other person can also make claims against your insurance company.

Besides all of the above, 1st party insurance also cover:

1) Breakage of front and rear windscreens.

2) All other glass panels (windows, quarter mirrors etc).

However, some insurance company covers only Item 1 alone. Others cover both Item 1 and 2 above. Find out yourself what your insurance company provides you.

Obviously, 1st party insurance is much more expensive. If you wish to know how your 1st party is calculated, here goes.

Car insurance required, say RM50,000. The first RM1000 is calculated at RM252 approximately.

The balance (of thousands) is approximately RM26 per thousand. No problem I hope.

Third party insurance is slightly less expensive, maybe currently in the range of RM100.

To end this short article, remember though you’re entitled to a N.C.B. (No Claims Bonus) yearly. If you make no claims against your insurance company.

N.C.B. rates of discount are for cars:

  • 1st year 25% discount
  • 2nd year 30% discount
  • 3rd year 33.5% discount
  • 4th year 45% discount
  • 5th your 55% discount

So, ladies and gentlemen, take out your calculators and do your own calculations!

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Related web pages:

1) Private Car Insurance Calculator

2) Bad Experience of Car Insurance Claim