Car insurance in Malaysia – Should you save on this?

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Every year, you will need to buy car insurance before you are allowed to renew your road tax. Depending on the make and capacity of your car, the insurance amount varies. A lot of vehicle owners tend to take this for granted thinking that the coverage is essential and that you buy what is given to you.

Cut cost, not corners

When it comes to any form of insurance, you need to be aware of what you are paying for and how it affects you financially. Naturally, the more expensive your car is, the more premium you have to pay when it comes to insurance. While paying this once a year might not seem to daunting, but if there are areas that you do not need to cover, then why pay for it.

What to take note of?

Make no mistake about it but your car insurance makes up a portion of your expenses for car maintenance. It is directly related to the price of the vehicle which means, it will decrease over time. So, what are the areas that can help you to reduce your yearly car insurance premiums? Here are some pointers.

  • New or used – Before you buy a car, do consider the insurance policy. This is because the price of the car will affect how much you need to pay for insurance. If you are buying a new car, the vehicle insurance is mostly absorbed into the total price (that you will get from the loan). You will feel the pinch from the second year on. Used cars meanwhile are cheaper which means you pay less for insurance. However, you need to select your vehicle carefully so that you do not save on insurance but pay more for repairs.
  • NCD – Non-claim Discount. Sometimes called the NCB or Non-Claim Bonus, this is a popular issue with car owners. If you keep a clean record without making any claims in a year, your insurance policy gets discounts in the following period. In other words, if you met with an accident and the repairs are very minor, you might not want to claim from your insurance and pay the expenses yourself. With the car value decreasing, you pay less as each year advances. Generally, you get more discounts from the second year onwards (25%). It is 30%, 38.33%, 45% and 55% after the fifth year.
  • Know what you are insuring – Never leave it entirely to your agent to do this. Always check and see what you are buying. You should not over or under insure your car. Taking the middle ground would be ideal here. While you cannot predict what expenses might incur during an accident, some coverage might not be necessary as protection against car accessories.

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