Should You Choose Comprehensive Car Insurance at Renewal Time?
Should I Buy Comprehensive Car Insurance?
When it comes to car insurance policies, there’s a ton of conflicting, sometimes unsolicited advice that you are likely to receive from well-meaning friends and relatives.
It can be tough for a noob car owner, even a seasoned one to make a decision on which type of policy to choose.
Should you opt for a ‘Comprehensive’ car insurance policy that costs more, but also provides greater coverage or a less expensive ‘Third Party’ or ‘Third Party, Fire and Theft’ policy that helps you save more upfront?
To get to the bottom of these tricky questions, let’s first find out the differences between these policy types:
What are ‘Comprehensive’, ‘Third Party’ and ‘Third Party, Fire and Theft’ car insurance plans?
- Comprehensive: This type of insurance covers your car in case of accidents (regardless of fault), fire and theft. It also covers claims made by a third party (e.g. another driver) for damages to their property and person.
- Third Party: Only covers claims made by third party for damages made to their property or person.
- Third Party, Fire and Theft: Covers your car in case fire and theft as well as claims made by a third party for damages made to their property or person. This policy does not cover damages to your car in case of accidents.
In general, Comprehensive car insurance is the most expensive of the three, whereas Third Party coverage is the least.
While it is often in our nature to go for the most inexpensive choice, is it the right decision when it comes to car insurance?
This next section will highlight all the times a Comprehensive plan would make more sense.
| See also: How To Pay Less For Your Car Insurance In Malaysia |
When you should consider Comprehensive car insurance
Not all cars and car owners need Comprehensive coverage. For instance, very old cars might not require or even qualify for Comprehensive coverage.
However, in many other instances, this type of insurance can prove to be the money-smart option, even if it is a bit more expensive.
Here are seven times a Comprehensive car insurance policy makes sense:
1. If your car is under five years of age
Cars, especially new ones are a costly purchase to make. Even a fairly basic local car can run into tens of thousands of Ringgit!
Thus, it’s important to protect your purchase with a Comprehensive insurance policy that provides wider coverage.
Plus, you can have peace of mind knowing that your new or new-ish car is covered for a range of incidents i.e. theft, fire damage, repairs after accidents (your fault) and damages to other people’s property.
2. If you can’t afford to pay for car repairs in case of accidents
If you get into a fender bender (your fault) and don’t have Comprehensive car insurance, you’ll have to foot the costs for repairs to your own car.
Car repairs are notoriously expensive, even minor incidents can cause damages that cost a ton to fix!
You don’t even want to think about the expense if your car is severely damaged from an accident.
With Comprehensive car insurance however, you can file a claim when accidents occur, no matter who is at fault (you are advised not to admit a fault though).
If your claim is successful, your insurance will cover your car.
3. If your car is still under a hire-purchase loan
In the very likely event that you took out an auto loan to buy your car, it’s good idea to opt for Comprehensive car insurance.
This is because if your car gets stolen, damaged by fire or if an accident (your fault) leaves it beyond repair, you’ll be covered by the policy.
On the other hand, assuming you decide to buy a Third Party policy and one of these mishaps occur, you’ll be left without a working vehicle and still owe the bank!
Imagine having no car but being stuck with a loan to pay off every month.
With a Comprehensive policy, you may be able to cover a large part of your loan with successful claims.
But if you can’t afford a good Comprehensive plan, you should, at the very least get a Third Party, Fire and Theft policy.
Do note that with this policy type, you will not be able to claim for damages arising from accidents that are your fault.
4. If your car has low market value
While this advice might sound beary weird, hear us out.
Even with detariffication of car insurance premiums underway (from 2017), the market value of your car still plays a major part with premium prices.
Newer cars with lower market value will also have a lower, perhaps more affordable premium.
What’s interesting here is that market value might have very less to do with the actual quality of a car.
Two cars in similar condition, specs, age and type could be priced differently for reasons like brand popularity and resale value.
When you look at it this way, you are paying less in premiums for similar coverage, protection and extra benefits.
As long as you don’t underinsure your car, you’ll be getting more value out of a Comprehensive plan when compared to a basic policy.
5. If there is more than one driver
When you are the only one driving, you are in control, able to take all the necessary precautions and limit the likelihood of mishaps with your car.
You may park only in safe spots, drive with extreme caution, and pretty much just do everything right to reduce the risk of unwanted incidents.
But say you often lend your car to your brother or sister, who isn’t necessarily as cautious as you are; it’s probably a good idea to spring for a Comprehensive plan.
This way you won’t have to worry so much about who’s going to pay to fix your car if it gets damaged while in the care of another driver.
Do remember to list all other drivers; it’s free for the first two names (the policyholder and one other driver) and RM10 for additional drivers.
Unnamed drivers will typically incur an excess.
6. If you want complimentary extras
Freebies! Yes, with a Comprehensive car insurance plan (and some excellent Third Party, Fire and Theft plans), you can benefit from complimentary services and extras that’ll help you save more.
For instance, many Comprehensive policies come with free towing, roadside assistance (e.g. changing tires or battery charging), concierge, and warranty for post-repair parts.
While these extras alone might not make you opt for Comprehensive plans, it certainly adds value along with more inclusive coverage. They're not to be confused with car insurance add-ons of course.
Note that additional benefits offered will vary with policies, so do research beforehand.
7. If you can afford it
Yes, it is a little bit more expensive than other policy types but if you can afford it, this isn’t one of the things that you should scrimp on.
Consider this, even though you are paying more, you’ll be covered for much more than what the policy costs upfront.
A Comprehensive policy can cover for many types of liabilities even your legal costs.
Opting for a basic policy like Third Party or Third Party, Fire and Theft will help you save some money now, but could cost you a lot more in the future.
Ready to renew your car insurance online now? Follow our step-by-step guide right here, courtesy of the Bear!