Before embarking on any road adventures, you should always remember to buy car insurance!
Some vehicle owners buy insurance without giving much thought to it. It is not as simple as merely paying for the vehicle monthly installment and petrol.
Before I learned about car insurance
I always thought that Third Party, Fire and Theft (TPFT) Insurance will be the best option, since I can save money and it is the cheapest policy required to be able to drive and get a road tax in Malaysia.
But I was wrong, as my car will not be completely covered, and I could potentially underinsure my car due to not knowing the different types of product cover.
As I did more research, I began to find out why TPFT insurance is the cheaper compared to a Comprehensive insurance. It is always recommended to understand the different insurance covers by reading the policy terms to get the insurance cover you need.
Different policy types
- Third Party, Fire & Theft
If you have a TPFT policy and got into an accident that was deemed to be your fault, your insurance will only cover losses/damages to the other vehicle or property. That means your car’s repair costs will not be covered by the insurance policy.
- Comprehensive
If you have a Comprehensive policy, you will be covered for any fire, theft or losses/damages to your car regardless whether you are at fault or not. This will also cover losses/damages to the other vehicle or property.
No Claims Discount (NCD) at renewal
No Claims Discount (NCD) at renewal NCD is a reward for safe driving, which is given to drivers who have not made any insurance claim in a year. This ND is a specific discount rate on your car insurance premium that increases with each year until the rate hits 55%. What this means is that if you are a safe driver, then you will keep paying less for your insurance over the years!
NCD RATE FOR PRIVATE CAR
| Insurance Period | NCD Rate |
|---|---|
| 1st Year | 0% |
| 2nd Year | 25% |
| 3rd Year | 30% |
| 4th Year | 38.33% |
| 5th Year | 45% |
| 5th Year Onwards | 55% |