Top 10 Questions to Ask Before Buying Car Insurance
Is it Time to Renew Your Car Insurance Plan?
It’s not easy (or fun) navigating the world of car insurance policies, especially if this is your first time around.
Not only is the subject a dry one, it also involves you shelling out precious cash!
We’re here to help! By narrowing down the most important questions to ask of your insurance plan and yourself, we’ll help you decide on the best plan for your needs. Moreover, once you know your way around a car insurance renewal, you’ll be able to do it in a jiffy.
So let’s get to it! Here are 10 questions you need to ask before renewing your car insurance plan:
1. How much should I insure my car for?
This question will come into play when you realise that premiums are primarily based on the sum for which you are insuring your car (among others).
The sum insured reflects the value of the car at the time the plan is purchased.
Thus, when figuring out how much you should insure your car for, you’ll need to find out your car’s market value.
There are many online resources to help you figure out your car’s estimated value e.g. MyCarInfo, a site that generates free (and paid) valuation reports.
Even your car insurance provider will be able to furnish you with an estimated market value, but it is a good idea to find out independently as valuations may differ with providers.
When deciding how much to insure, remember that the higher the sum insured, the higher the premium (when all else is equal). You've already forked out a princely sum to buy your car, so don't forsake protecting it with the right amount of insurance it deserves.
2. What is an agreed value and market value plan in car insurance?
You may have come across these terms in relation to car insurance, but what do they mean?
An agreed value policy will pay the sum insured – as agreed – at the time the policy was purchased.
On the other hand, a market value policy pays out based on the value of the car at the time of the claim.
An agreed value policy is generally preferable but not necessarily offered by all providers, so do check with yours beforehand.
3. Should I buy from an agent, online or other?
There are many ways to buy car insurance these days.
For instance, you can buy a plan from an agent, directly from an insurance provider, your bank, a government agency like MYEG or even online.
But which is right for you? To decide, you’ll have to first consider the level of service you need.
If you want a fully convenient, won’t-have-to-lift-a-finger type situation, then an insurance agent might be a good option. But do prepare to fork out more money in commissions.
Also, you may feel obliged to go with the plans suggested by your agent and have fewer options as a whole.
And of course, you can always go online as well. Even though not all car insurance providers currently have online facilities, it's a good starting point to start collecting quotes for your car before it expires.
4. Can I wait till the last minute to renew my car insurance plan?
It’s not the best idea to wait till the last minute, but with the hectic life you (probably) lead, it’s totally understandable.
Try to source for and renew your insurance plan at least a week in advance (before your current insurance expires).
This should give you sufficient time to find the right plan, supply the necessary documentation (e.g. car registration card and previous policy), have your new policy processed, and your road tax renewed.
Remember that if your insurance is expiring, so is your road tax. And you don't want our local authorities to pull you over now, don't you?
Thus, if you wait till it expires, you won’t be able to (legally) drive on the road till it’s renewed. As a friendly GoBear reminder, you can renew your car insurance 60 days before it expires.
5. Should I stick with my previous insurance provider?
It’s a good idea to see what else is out there! You could be missing out on fresh, innovative car insurance products joining the market, especially in light of premium detariffication.
For instance, one interesting new offering is AXA FlexiDrive, a telematics plan that provides up to 20% off premiums for safe driving, among other benefits.
You may also want to consider looking around for better deals. Just think, what if another insurance provider is able to offer you better coverage at lower premiums?
Now if after you’ve looked around and found that your current provider is still the best – don’t be afraid to ask for a loyalty discount.
6. What type of car insurance should I get?
There are three main types of car insurance plans, which largely differ in terms of premium price and levels of coverage. Here’s a quick breakdown to help you decide:
- Third Party provides coverage for claims made by a third party (e.g. another driver or pedestrian) for damages to their property or person.
This is often the cheapest option of the three and understandably so, because of its limited coverage. People with very old cars often opt for this type of policy.
- Third Party, Fire and Theft will cover your car in case of fire and theft. It also provides coverage if a claim is made by a third party for damages to their property or person.
But under this policy, you will not be able to claim for damages to your car in case of accidents.
Consider this policy if you can afford to cover accidental damages to your own car.
- Comprehensive insurance covers your car in case of accidents, fire and theft. It also covers claims made by a third party for damages to their property and person.
This option is often the costliest among the three, but it is still cheaper than to cover the costs of repairs to your own car in case of accidents.
Drivers of newer cars typically opt for comprehensive coverage.
7. Should I buy add-on coverage for my car?
Add-on coverage will financially protect your car from incidents that aren’t included in a regular policy. So what’s typically not included?
- Damage to windscreen
- Theft of aftermarket accessories (e.g. stereo system)
- Environmental damage like floods, typhoons and landslides
- Liabilities to and of passengers i.e. when passengers sue or are sued
- Strike, riot, and civil commotions.
For your insurance to pay out in case of these incidents, you’ll need to purchase the related add-on cover with your plan.
Which add-ons should you opt for? Decide by thinking about the incidents for which you are most at risk.
For instance, if you have purchased a high-end car audio system and flashy rims, you might want to consider a car accessories add-on.
If you live in a flood-prone area, then a flood cover might be needed.
Most drivers purchase a windscreen cover, as it is quite a common occurrence and the add-on costs just 15% of the coverage sum.
So for instance, if you insure your windscreen for RM600, your add-on premium will be just RM90 per year.
Moreover, your NCD will not be affected if you claim for windscreen damage.
8. Can my policy cover other drivers?
Yes it can! For instance, if you share a car with a sibling, you can add his or her name to the policy.
It’s free to list up to two drivers on a car insurance plan – the policyholder and one additional driver.
If you wish to add more drivers to the policy, there will be a RM10 charge per name.
Listing additional drivers will keep you from having to pay the Compulsory Excess Fee in case a claim is filed by a named driver.
The excess for a non-named driver is RM400, so it certainly makes financial sense to list frequent drivers.
9. Will my policy cover me during Grab trips?
This depends on what it says in your policy contract, but the answer is most likely NO.
If you are a Grab driver with a regular private car insurance plan, your provider may reject claims for incidents that occur while servicing a passenger.
Thus, it’s important to get an appropriate insurance plan that will properly cover all your bases.
For Grab drivers, one option available at present is the MSIG E-Hail E-Zee, an add-on to a comprehensive policy.
It provides coverage similar to comprehensive insurance such as protection for theft, fire, and accidents to a third party.
But coverage will still apply even while you moonlight as a Grab driver!
It also comes with added benefits like coverage for passenger liabilities and accidental death or permanent disablement of the policyholder.
10. What additional benefits come with my policy?
Many comprehensive and some third party, fire and theft plans come with extras like roadside assistance, free towing and warranties for repair parts, and more.
These will differ with plans, so it is advisable to conduct a bit of research to find out about the complimentary benefits that come with (if any). Do pay close attention to what you're signing up for, and especially take note of the circumstances in which your car insurance will not cover you.
We know that 10 questions might sound a lot - or even intimidating or confusing - but when it comes to the safety of yourself and your fellow passengers, there is no short cut.
Spend some time to find out just what you need as a vehicle owner and Malaysian road user and address them today, beginning with these questions.