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5 Things Your Car Insurance Policy Won’t Cover

Most Malaysians (us included) have a really bad habit of not reading the “Terms and Conditions” of anything, in general! We simply skip the tedious process of going through the details and end up just signing wherever as instructed. Does the above scenario ring a bell?

If you are guilty as charged, do you know that different types of car insurance policies provide different coverages? Well, if you don’t, you can read up about it here. As with all insurance policies, there are certain limitations to coverages.

Did you think they were covered under your car insurance policy? Sorry, they’re not

Many consumers who typically have their car insurance renewals handled by their agents lack in-depth information on what they are actually covered for.

In these situations, the first car insurance policy purchased with the new car was handled by an agent, and hence subsequent calls for renewal often revolves around “getting it sorted quickly to get back on the road legally.” This has resulted in many doubts about what is actually covered upon signing of the agreement, and what one can claim when the unfortunate situation arises.

The following six common items are typically not included in your comprehensive car insurance policy.

  • Windscreen – damages to windows and windscreens of the vehicle
  • Special peril – losses and damages due to natural disasters such as storm, typhoon, landslide, flooding, and other acts of nature
  • Strike, riot, and civil commotion – damages and losses incurred caused by strikes, riots, and other commotions
  • Legal liability of passengers – covers the legal liability of your passengers arising from acts of negligence (for example, your backseat passenger throwing a banana peel on to the road resulting in the next car swerving into a collision)
  • Legal liability to passengers – covers the policyholder from legal liabilities brought against him or her by the passengers (for example, if you were involved in a car accident and your passengers decide to take legal action against you; this does not apply to car e-hailing services)
  • Additional drivers – a policy holder can name up to two drivers per vehicle for free, additional names will incur a cost of RM10 per person

Often times, our negligence or unexpected “holes” in coverage can cost you quite a huge sum of money. You would expect your car insurance to cover your death during a serious car accident, but does it really? Continue reading to find out what are the top five things that a car insurance policy will not cover.

1. Your own death or bodily injury

You might think that by paying your car insurance premium, you should at least be covered for your own death or medical expenses for injuries sustained from accidents. In actual fact, only your personal accident or medical insurance will cover that, not a car insurance.

2. Your liability against claims from passengers in your vehicle

This means that there will be no coverage for you in the event that your passenger(s) decide to sue you or your authorised driver for careless driving, which caused bodily injuries, death or property damage. So, if the passengers in your car were injured and they want to sue you for negligence driving, your car insurance will not be able to help you with that.

3. Loss, damage or liability arising from acts of nature

If any loss or damage to your car is caused by any unforeseen events such as floods, typhoons, hurricanes, storms, earthquakes or any other convulsions of nature, your car insurance provider will not be responsible to pay out such claims.

4. Wear and tear, and depreciation

Just like us humans, cars age too. They are not built to last forever. As car parts wear out over time, the value of your car decreases along with them. Let’s be honest and realistic here, a car’s value drops the moment it leaves the showroom. The loss of value of your car due to the damage sustained, or any losses or damages over a prolonged period of time due to wear and tear such as rust and corrosion, will not be claimable.

5. Custom parts and equipment

Pimping up your “ride” might earn you a few extra credits among the ladies but if your car is damaged or stolen, your car insurance unfortunately will not cover the custom parts and equipment you have added or modified to your car. This can include:

  • Custom seats or interiors;

  • Custom rims, paint and spoilers;

  • High-performance exhaust systems;

  • Stereo equipment, DVD players and in-vehicle communication systems.

The coverages provided are always bold and highlighted in insurance policies, but the things that are not covered are treated as “loopholes” or “grey areas”. It is therefore important to compare and decide carefully on the best insurance policy for you. Take some time to read through everything, ask your agent plenty of questions if you have any doubts about the policy.

Of course, you are provided with options to add on certain coverages for special perils such as flood, landslides and legal liabilities to/of your passengers. All you have to do is just pay an additional premium to your current policy. This way, your policy covers a broader range and consecutively provides you with a greater sense of security.

Do you need specialised insurance or add-ons?

If you are moonlighting as a Grab driver, your typical comprehensive car insurance policy will not provide you with the right coverage.

You’ll effectively be using your car for commercial purposes and you will not be getting protected unless you subscribe for certain add-ons that cover e-hailing services. Car insurance providers have been quick to update their product line-up since motor detariffication took place in 2017, allowing Grab drivers to buy E-Hail E-Zee from MSIG or AXA SmartDrive Sharing for their fare-paying customers.

Also, have you thought about how the age of your car affects your car insurance coverage?

Most insurance companies set a limit to how old your car can be to be insured. Safe to say that if your car is aged 15 years or more – even if it’s still running perfectly – you’ll need to make sure that your insurer of choice will agree to insure it.

Speak to your insurance company about your driving needs and see if they have the right product for you with the right add-ons to give you all the coverage you need.

Be a responsible driver – and meet your car insurance obligations

As a civic-minded and safe Malaysian on the road, you need to adhere to a wide range of obligations and regulations which are applicable throughout the validity of your car insurance policy.

Here are a few nagging reminders:

  • Keep your damages to a minimum

This is as obvious as it gets. However, do keep in mind that you are legally obligated to take all precautions to ensure that damages are kept as minimal as possible – or non-existent. While you can’t always avoid accidents, you can still send your car in for an unscheduled check-up if you hear certain unfamiliar rumbles in the car.

  • Be a responsible driver

If you are driving under the influence of alcohol, it’s already too late. So before you decide to hit up a second drink, consider whether you should be getting behind the wheel in the first place. And let’s not forget maintaining speed limits, obeying all traffic rules and ensuring the safety of all road users.

  • Maintain honesty and show good faith

Your car insurance policy requires you to meet the duty of disclosure. What this means is that it’s your responsibility to update your insurance company of anything that might have an effect on any potential claims you have. It’s best to avoid any situation where your lack of honesty is found out which might hamper your chances of getting your car insured appropriately in the future.

In a nutshell, always seek to understand your policy thoroughly before buying your car insurance. Don’t be afraid or shy to ask questions, because there are no stupid questions in this world, and the devil is always in the details!

Before we leave, did you know that you could enjoy a savings of at least 10% off your car insurance premium when you renew online with us? That’s a good amount of moolah that can go towards a good meal or new in-car accessories!

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