Purchasing car insurance in Malaysia may seem simple, but many drivers still fall into common pitfalls that result in extra costs, insufficient coverage, or hassles during claims.
Whether you’re a first-time car owner or renewing your insurance for the tenth time, understanding these common mistakes will help you make better, safer, and more cost-effective decisions.
Ultimately, the goal is to choose a policy that meets your needs, offers strong protection, and remains cost-effective. Below are eight common mistakes people often make when buying car insurance.
- Not Comparing Prices
A lot of Malaysians pick the first auto insurance quote they see, thinking it’s cheap, and lose out on better bargains. In reality, prices and benefits vary among different insurance companies.
With comparison tools like Key Plus, Fincrew, and MyEG, you can easily check multiple offers before deciding on your purchase.
- Choosing The Cheapest Policy
A lower price can be appealing, but the cheapest policy isn’t always the most reliable. Some come with restricted coverage or hidden exclusions. Make sure to check the details so you won’t end up arguing with your insurer later.
If something bad happens, a low-cost plan might not protect you as much as you as you expected. It’s important to look at more than just the price when comparing coverage.
- Not Understanding Coverage Types
A lot of Malaysian drivers buy car insurance without really knowing what the differences are between comprehensive, third-party, and third-party fire and theft coverage. People often get confused or disappointed when they find out that some incidents are not covered.
- Comprehensive Insurance: provides the widest protection, including damage to your own vehicle, theft, and third-party liabilities.
- Third Party, Fire & Theft: basic protection with added coverage for fire or theft.
- Third Party Insurance: the most basic, only covers damage or injury caused to others, not your own car.
If drivers don’t recognise these differences, they may end up choosing a policy that doesn’t meet their needs.
- Ignoring The NCD Discount
Many drivers forget about their No Claim Discount (NCD), so double-check the details when you receive your quote before proceeding with the purchase. After the policy is issued, adding or changing the NCD may take longer and cost more.
- Providing False Information
Be honest and transparent throughout the application process and when claiming with your insurance company. Provide all essential information, such as your car’s age, claim history, prior accidents, engine modifications, and so on.
Overall, do not lie. In some situations, being dishonest with your insurance company may cause them to deny your claim.
- Ignoring Windscreen Coverage Add-On
A cracked or shattered windscreen is one of the most common car issues in Malaysia, caused by uneven roads, construction areas, and loose stones. Many drivers don’t add windscreen coverage because they think it won’t happen to them.
However, replacing a windscreen, especially for modern cars equipped with sensors or ADAS technology, can cost RM1,000 to RM5,000 or more.
Windscreen add-on coverage is affordable and helps you retain your No Claim Discount (NCD) if you file a claim.
- Buying excessive coverage
It is possible to buy too much coverage. For example, if you own an older vehicle, it is not advisable to purchase a comprehensive coverage. Aggressive advertising should not influence your decision.
Furthermore, you should not pay more than 1/10th of the value of your car for insurance.
If you can’t find a policy at a good rate, maybe it’s time to consider looking for a new vehicle.
- Choosing a Higher Deductible
Choosing the wrong policy deductible could result in a financial problem in the future. Your policy deductible is the amount you are responsible for paying toward a covered loss before your insurance kicks in to cover the remaining costs.
The higher the deductible, the lower your premiums will be. While many people choose for a higher deductible, they are often unprepared for the financial consequences of that decision. You must figure out the right deductible amount for your current situation.
Conclusion
Before you purchase car insurance, make sure you know everything there is to know about it, and take note of these common mistakes. By avoiding these common mistakes, you can ensure better coverage, smoother claims, and greater peace of mind on the road.