If you're in the hunt for auto insurance, shopping around is essential, and you also need to understand the different types of auto insurance policies available. If you have never bought auto insurance before, comprehending what is and is not covered can be pretty baffling. Though they may look alike, these policies are very different in the cover they provide and are available to help protect you, your passengers, and your vehicle if you're involved in a road mishap. Luckily, auto insurance is not as confusing as it may seem; with little research, you can be confident of making the right decisions for your needs. This post is put together to help you understand the most typical auto insurance coverage types but first, let's talk about the basics of car insurance.
Understanding The Basics Of Car Insurance
Car insurance is a contract between you and your insurer. The policy protects you against financial loss if involved in an accident or the car was stolen. Instead of paying a premium, these unfortunate incidents happen, the insurance company pays for your losses as outlined in your policy. Your car insurance policy provides coverage for:
- Property – such as damage to your car and in case it was stolen
- Liability – your legal responsibility to third parties for bodily injury or property damage
- Medical – the cost of treating injuries, rehabilitation, and other medical expenses
It's mandatory by the law in Malaysia to carry an auto insurance policy while driving on public roads, and these coverages are priced individually. This allows you to customize coverage amounts to suit your exact needs and budget.
Auto insurance policies are normally issued for six-month or one-year periods and are renewable. The insurer sends you a notice when your insurance has expired and it's time for renewal. So now, let us talk about the three types of insurance coverage available in Malaysia.
Third-Party Insurance Policy
This is the most basic auto insurance policy that any insurance company in Malaysia offers. The third-party protection plan is limited; therefore, it has the lowest premium plan compared to other policies.
In Malaysia, it is required by the law to carry at least a third-party plan if you own a vehicle or a motorcycle. When a car is purchased, it's essential to purchase an auto insurance policy for the car, without being allowed on public roads. The policy protects you against any third-party claims against any injury or death caused by you. The third-party policy also protects you against any damage to third-party property caused by you.
Third-Party Fire And Theft Insurance Policy
Third-Party Fire and Theft policy looks similar to third-party policy except that it covers a little more than just a third-party claim. Besides protecting you against injuries or death and losses or damages to the third-party, the third-party fire and theft policy also protects your car against damages due to accidental fire or if the car is stolen. It is worthy of understanding that third-party fire and theft policy only protects your car against loss or damages due to accidental fire and theft and also to third parties but does not cover you and your car in case of any other accident. So, this implies that can only make a claim for events such as:
- Stolen vehicle
- Damages or loss due to fire
- Damages due to attempted theft such as broken windows
Comprehensive Coverage Insurance Policy
This policy offers the widest auto insurance coverage for vehicles. A comprehensive insurance policy protects you against all claims mentioned above and protects you against your car's loss and damages during an accident.
Not sure where to start? Fincrew.my has got you covered. They are one of the best auto insurance comparison websites in Malaysia.
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