Driving is an essential part of daily life for most Malaysians, whether taking your kids to school, head to work, or going on family road trips during the holidays. However, many drivers still have misconceptions about how their vehicle protection works.
If you are looking for a new car insurance provider or just renewing your policy, it is important to know the facts so you can make the right decisions.
In this article, we will break down 5 common auto insurance myths that Malaysians still believe in 2026 and clarify the facts behind them.
Myth 1: All Insurance Providers Offer the Same Value
Reality
Although Bank Negara Malaysia regulates the insurance industry, many drivers still assume all companies have the same prices and services. As a result, they often just stick with their current provider out of habit.
Since the motor detariffication in 2017, pricing is no longer fixed. Different companies use different formulas to calculate your risk. This means you can find significant price differences for the exact same coverage.
What You Should Do?
- Before your policy expires, take a few minutes to compare auto insurance premiums using online platforms like Key Plus. So, you can quickly view side-by-side quotes from leading providers in Malaysia and secure the best deals.
Myth 2: Older Cars Don’t Need Insurance
Reality
Many Malaysians assume that older cars do not need insurance because of their lower value. However, Malaysian law requires at least third-party auto insurance to drive legally.
In addition, older cars can still be involved in accidents or get stolen. In fact, some older models are even more likely to be stolen because they do not have modern security features.
What You Should Do?
- If your car is older, it’s still a good idea to consider a comprehensive policy, or at least a third-party fire and theft policy. Comprehensive coverage can protect you against damage from accidents, floods, or theft. These risks could otherwise lead to big financial losses.
Myth 3: NCD Can Be Transferred to My Family Members
Reality
A common misconception is that the No Claim Discount (NCD) is linked to the vehicle. In fact, the NCD is tied to you as an individual. You may transfer your NCD between vehicles registered in your name, but you cannot transfer your 55% discount to another person, including your spouse, child, or sibling.
What You Should Do?
- When selling your old car and purchasing a new one, request an NCD withdrawal from your previous insurer. This enables you to transfer your accumulated discount (up to 55%) to the new premium, which is often higher.
- Since NCD is non-transferable, encourage your family members to register their own vehicles as soon as possible. This helps them build their own NCD history over time, which can save them a lot of money.
Myth 4: Comprehensive Insurance Covers Everything
Reality
Many Malaysians assume that once they purchase a comprehensive insurance policy, they’re covered for every possible scenario. However, most policies come with exclusions and limitations.
For example, standard auto insurance in Malaysia usually does not cover damage from natural disasters, such as floods, unless you add special perils coverage. It also does not cover wear and tear or mechanical breakdowns.
What You Should Do?
- Review your policy’s terms and conditions carefully and address any concerns with your insurer or agent.
- If you live in a flood-prone area, consider buying additional coverage for natural disasters.
Myth 5: It’s Okay to Delay Renewing My Car Insurance
Reality
Driving without valid auto insurance is illegal in Malaysia and may result in substantial fines or imprisonment. If you do not renew your insurance on time, you could lose your NCD benefits and may not be covered if an accident happens.
What You Should Do?
- Remember to set reminders for your auto insurance renewal. Digital insurance platform like Keyplus malaysia allows you to renew your policy online efficiently. Some platforms will even send you reminders, so you won’t miss your renewal date.
Final Thoughts
Understanding the facts about common auto insurance myths is key to making informed decisions and ensuring proper protection on the road. With many providers in Malaysia offering different policies and add-ons, it is important to research and select coverage that fits your needs and lifestyle.
Remember, knowledge is power. Do not let myths prevent you from making informed auto insurance decisions.