Insurance

In order to purchase a vehicle’s road tax, owners of cars and motorcycles, it is compulsory for insurance coverage be obtained for their vehicles.

The above also goes for lorries, trailers and buses as well.

Under the Road Transport Act 1987, it is therefore correct for one to assume all vehicles on the road must have insurance coverage before a road tax can be issued. For those who are not too well versed with matters involving insurance, permit me t to explain that insurance coverage are basically of 2 types:
i) 1st party or comprehensive coverage for cars / vehicles.
ii) Third party coverage.

For motorcycles, the insurance coverage is slightly different. Unlike in previous years, where only a third party insurance is required, today, the authorities insist that motorcycles should ideally be covered by “All Riders’ Policy”.

Talking about insurance coverage for vehicles and motorcycles, it should be made known that 1st party policies are obviously more expensive. Whereas, 3rd party insurance being less expensive.

Today, there exists no problem for the purchase of 1st party coverage. However, the Malaysian motoring public has been facing tremendous problems when attempting to purchase 3rd party insurance coverage especially for cars and vehicles which are over 10 years old.

The authorities are currently in the process of discussing a new insurance company to be setup to cater for 3rd party insurance. Hopefully, the above problem can be settled as soon as possible to provide the least hassle to insurers.

The authorities have assured the public that a new insurance company to be called the TIPID Newco will be set up by the beginning of 2011. When talking about insurance coverage for cars, vehicles and motorcycles, mention should also be made of Non Claims Bonus (N.C.B.) or No Claims Discount (N.C.D.).

Each following year, insurance companies give discount to owners of vehicles or motorcycles. It acts as an incentive to motorists to drive carefully and be good road users. Those who are not involved in accidents are given certain discounts. This also provides drivers and riders with a lesser burden when paying premiums for insurance purchased.

Below, I have included a table of discounts given generally by insurance companies in Malaysia:
1st year – No discount given
2nd year – 25% discount
3rd year – 30% discount
4th year – 38.3% discount
5th year – 45% discount
6th year – 55% discount

However, insurers should remember that no claims are made or arises from your policies and the policy should be insured with the same company for a continuous period of 12 months in each of the following instances.