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Do You Really Need These 6 Car Insurance Add-ons?

What are car insurance add-ons?

When buying car insurance, you’ll have the option to extend the level of coverage on your policy with add-ons for different types of protection.

But wait – why do we need more coverage? Doesn’t a car insurance plan cover everything? No – in fact, it does not.

Even comprehensive car insurance is not all-inclusive as people often assume; add-ons help fill the gap for incidents that aren’t covered by basic insurance plans as provided by your insurance company.

Still, add-ons to car policies cost money – and when you are trying to save, you may think it wise to skip add-ons altogether!

But even if it is cheaper now (without add-ons), it may cost you more in the long run if you encounter incidents that you’ll have to pay for out of your own pocket.

Here’s a list of common car insurance add-ons with handy tips to help you decide if you should opt in or not:

1. Car accessories

If you have upgraded your car with high-end speakers, custom rims and navigation systems, don’t count on your regular car insurance plan protecting it in case of theft or accidental damage.

This is because; most car insurance companies do not cover aftermarket accessories, only standard installations as listed by the car manufacturer.

To gain coverage, you’ll need to add-on a car accessories cover which costs 15% of the annual insured value.

For instance, if you insure your accessories for RM1,500, the premium for this add-on would cost RM225 per year.

  • Should you get it?
    If you have fitted your car with expensive accessories, then it is a good idea to consider getting this add-on. But if you haven’t installed any fancy new gizmos in your car, then it doesn’t apply and you may skip it.

2. Special perils: flood, typhoon, and landslide

When nature strikes, you’d better hope that your car isn’t anywhere nearby – especially, if you don’t have appropriate add-on insurance coverage!

Natural disasters like floods, typhoons, hurricanes, landslides, etc. are not covered by a standard policy from your car insurance company.

To receive coverage for this sort of incident, you’ll need to add on a ‘special perils’ extension to your insurance plan.

The annual premium for the add-on is 0.5% of the sum insured. Thus, if you have insured your car for RM40,000, the add-on would cost RM200.

  • Should you get it?
    Flood damage and the like can be quiet severe, sometimes resulting in total loss. Thus, if you live or work near flood-prone areas or travel by car during monsoons to mountainous/hilly areas, you should consider the extended coverage.

3. Strike, riot, and civil commotion (SRCC)

Imagine a violent mob of football fans taking out all their anger and frustration for losing the game – on your car!

Can you claim compensation from your car insurance policy? Not if you don’t have this add-on.

Most car owners tend to skip this one as riots, etc. does not happen very often in Malaysia.

Still, it does happen; you may recall the notorious Low Yat riot or the more recent JB mob attack.

In any case, if you are considering this add-on, the good news is that the premium costs just 0.3% of the insured sum.

Thus, a car insured for RM40,000 would only have to pay RM120 per year for this add-on.

  • Should you get it?
    While the probability of damage from a strike, etc. is historically low in Malaysia, no one can say for sure that it will never happen to you. So if you decide to skip this addon, be extra careful when leaving your car parked in open streets, near stadiums, highly-crowded areas and during any scheduled protests.

| See also: 5 Reasons Why Motor Detariffication is a Good Thing |

4. Car windscreen

It’s a common misconception that damage to your car windscreen is covered with a regular car insurance plan.

The truth is – you will need to add-on a windscreen cover to enjoy compensation for repairs or replacement. And depending on your plan, re-tinting your screen may also be covered.

The annual premium for a windscreen add-on is 15% of the cover. Thus, if you were to insure your windscreen for RM1,000, the premium would cost RM150 per year.

  • Should you get it?
    If you frequently drive by construction roads or alongside heavy vehicles, then this add-on is recommended, especially if you can afford it. Moreover, your No-Claim Discount (NCD) will not be affected if you do file a claim.

5. Passenger liabilities (to and of)

If you often carry passengers in your car, you might be interested to learn about the passengers’ legal liabilities add-on.

There are two types of passenger liability add-ons to consider.

The first, a coverage extension for legal liabilities of passengers, which cover actions brought against your passengers while riding in your car.

For instance, if your passenger opens the car door and accidentally injures a pedestrian, this add-on covers legal liabilities, if the pedestrian decides to sue.

The other type of add-on covers your legal liabilities to a passenger if he or she decides to sue you for causing damage or injury to their property and persons or death.

  • Should I get it?
    If you do frequently carry passengers in your car, especially litigious ones, you might want to consider this add-on. But if you are mostly just driving yourself around, to work and back, it might not be necessary.

6. Other accident-related covers

When you suffer a car accident, the level of damages can be far reaching – to an extent where it may not be covered by your insurance policy.

For instance, even if you have purchased a comprehensive plan, things like repainting your car or damage to a smart key fob, may not be covered.

Thus, additional accident coverage from your insurance company may prove helpful. Here are other accident-related add-ons that may be offered with your car insurance:

Cash allowance

Covers transport or car rental costs while your car is being repaired (after an accident). The annual premium often costs as much as the per-day benefits e.g. a RM50 premium provides a RM50 per day cover, for a total of 10 days.

  • Should you get it?
    If your daily travel needs are significant, then you might want to consider this addon, to at least subsidise heavy transportation costs. On the other hand, if your travel needs are minimal because you have a desk job or are a stay-at-home parent, it wouldn’t cost you much to skip it.

Personal accident insurance

Covers drivers and passengers if they are involved in an accident while riding in the insured vehicle. Benefits differ with plans but often include permanent disability and death pay-outs, medical coverage, bereavement benefits, etc.

  • Should you get it?
    If you have other insurance that overlaps with the benefits provided by a PA plan, such as medical insurance and life insurance, etc. then you can consider sitting this one out. But if you have no other insurance to cover you in case of accidents, then a PA plan is a must! PA plans are also sometimes bundled with other benefits, such as protection against legal liabilities to/of passengers, so it’s important to find out about the finer points of each plan before deciding.

Betterment waiver

Betterment charges are imposed when an older car (typically above five years) gets involved in an accident, and where the parts replaced are newer or ‘better’ than the original parts. With this add-on, betterment charges will be waived.

  • Should you get it?
    If your car is five years or older, you might want to consider this add-on. However, if you own a newer car, you don’t have to opt-in.

Now that you know about these common car insurance add-ons, how likely are you to spend upwards to give your ride the extra cover it deserves? There are also plenty other interesting add-on covers such as smart key coverage, depreciation cover, and unlimited towing services – which the Finder will be covering in the near future, so stay tuned!

To find out more about car insurance plans, premiums and add-ons, check out our comparison page and get renewing if it’s due!

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