Motor insurance is compulsory under the law of Malaysia.
This class of insurance is governed by the Motor Tariff Act and can only be transacted on a Cash Before Cover basis.
The main classes of vehicle can be broadly divided into 3 categories, namely:-
a) Private Cars
b) Commercial Vehicles including Special Type vehicles
c) Motor Cycles
Motor Insurance cover is available for
i) Comprehensive cover which provides cover for damage to own vehicle, third party vehicle and properties as well as liabilities
ii) Third Party cover which does not cover own vehicle damage
iii) Act Only cover which only covers third party bodily injuries
While premium is highest for the Comprehensive cover and lowest for Act Only cover, NCD or no claim discount is available on an increasing scale for good driving history. Commencing at 25% at the beginning of 2nd year, it reaches a maximum of 55% at the beginning of 6 year for private cars. Commercial vehicle NCDs are between 15 to 25% only.
Additional cover for perils like flooding, subsidence, landslides and falling trees may be added to the Motor Insurance policy. Passenger Liability cover is also a common extension. It is advisable to include cover for windscreen/windows as well as contents such as CD/DVD players, into the Motor Insurance policy.