Tips on motor insurance and claims
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astroboy
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Technically, general insurance works on the basis of "replacement value". Say u have a 10 year old car, one of your door need replacement due to accidental damage, insurance company will reimburse u with a 10 year old door, or equivalent value. If u want to buy new door, u must top up. I think its fair. U lost a 10 year old car, insurance company cannot be replacing you with a new car wat.. 
My question is if I buy a brand new E90 today, say December 2007, for RM220k, I buy insurance to cover RM220k but (touch wood) car got stolen in a month's time. Why couldn't I claim full? Why must I lost RM22k (normally they will knock 10% off from the new price in our claims). What kind of insurance can I buy to cover this RM22k, I'm suppose to transfer my risk to them wat? I don't mind if Insurance company to reimburse me with another similar condition December 2007 E90. What is the use of the insurance when the claim is insufficient to cover my losses, in this case, to get another replacement similar year and condition E90?
Now it seems the motor insurance is working like a used car dealer. U lost ur car meaning u sold ur car to them, against your will, at the buyer's price, which is how the 10% discount is explained...
There's this clause in the "standard" motor insurance policy called "Agreed Value", which many has removed to safe guard their interest. Now not all insurance policy has it, what it means is when vehicle is lost, agreed value will be reimbursed, in this case, the full sum insured la! Check with ur agent today. No? then terminate them! I am terminating mine next year. 1st year no choice..
My question is if I buy a brand new E90 today, say December 2007, for RM220k, I buy insurance to cover RM220k but (touch wood) car got stolen in a month's time. Why couldn't I claim full? Why must I lost RM22k (normally they will knock 10% off from the new price in our claims). What kind of insurance can I buy to cover this RM22k, I'm suppose to transfer my risk to them wat? I don't mind if Insurance company to reimburse me with another similar condition December 2007 E90. What is the use of the insurance when the claim is insufficient to cover my losses, in this case, to get another replacement similar year and condition E90?
Now it seems the motor insurance is working like a used car dealer. U lost ur car meaning u sold ur car to them, against your will, at the buyer's price, which is how the 10% discount is explained...
There's this clause in the "standard" motor insurance policy called "Agreed Value", which many has removed to safe guard their interest. Now not all insurance policy has it, what it means is when vehicle is lost, agreed value will be reimbursed, in this case, the full sum insured la! Check with ur agent today. No? then terminate them! I am terminating mine next year. 1st year no choice..
turbosnail
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This just happened to me. I sold off my car before I got my next and before the car was sold off a motorcylist hit my car from behind. He claimed he sustained serious injuries and claimed >RM10k from my 1st party car insurance. When I went to cancel my car insurance, I was told by the agent that since someone claimed the insurance, my refund would be forfeited(still have 6 months left). I demanded to know why, and I was told it was mentioned in my insurance policy.
Is this fair? I don't know. I felt cheated. First of all, someone hit me from behind and claimed my insurance. Second, because of that I lost my 55% NCB. Now they are telling me I cannot have my refund because someone claimed the insurance? What the hell?
Is this fair? I don't know. I felt cheated. First of all, someone hit me from behind and claimed my insurance. Second, because of that I lost my 55% NCB. Now they are telling me I cannot have my refund because someone claimed the insurance? What the hell?
the insurance regulation in this country is shit.we don't get to claim expenses for replacement vehicle and many other things.do u know in traffic light case if both parties claim light is green, you have to claim your own insurance because the sergeant won't be able to decide who is wrong who is right. so even if u were right and the guilty party beat a red light,u still lose.
also, if a motobike knocks into you,you can't claim his insurance,BUT he CAN claim yours for injuries.bloody joke right?stress
also, if a motobike knocks into you,you can't claim his insurance,BUT he CAN claim yours for injuries.bloody joke right?stress
affan66
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i don't understand why give a second hand part when the parts have been replaced new. For example, let's say a car had an accident and the part was already new prior to the incident. Why should the insurance company give a say 10 year old or equivalent part and not new?
Does the insurance company think the part will be 10 years old too?
In my case today for example, I do not expect a secondhand bumper as the bumper is new and original M-sport.
Does the insurance company think the part will be 10 years old too?
In my case today for example, I do not expect a secondhand bumper as the bumper is new and original M-sport.
affan66;292219 said:
I think that is so called betterment. But what if we replaced our old headlamps to new one due to the old headlamps are fading or crack by it own. and then 3 months later involve in an accident, do we still need to treat my headlamps as 10 years old headlamp and pay for the stupid so called betterment?
anaksarawak
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Need advice on which Insurance Company offer the best package.
Kurnia
AM Insurance
Takalful Iklas
MMA
Pan Global
etcs
Kindly state the extra items such as
Free AAM membership
Free coverage for flood
etcs
Kurnia
AM Insurance
Takalful Iklas
MMA
Pan Global
etcs
Kindly state the extra items such as
Free AAM membership
Free coverage for flood
etcs
devilsadvocate
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bro,
motor is tariff, all must charge for flood cover and the rate is fixed.
not sure bout takaful co.s though.
things that you should nego for if comprehensive is - NIL excess.
cheers
motor is tariff, all must charge for flood cover and the rate is fixed.
not sure bout takaful co.s though.
things that you should nego for if comprehensive is - NIL excess.
cheers
mini_jeff67;280928 said:
In Malaysia, we have what we call "Knock for knock Agreement" between all insurance companies. This basically means that if an insurance company insures a car on a comprehensive basis, then in the event of an accident, the same insurance company will have to pay for the claim regardless of whether the customer is at fault or not.
If it is your fault, then you make a claim for repairs to your car from your insurance policy and you will lose your NCB. This part is clear and simple.
However, if it is not your fault, you can make an ODKFK claim which means you still report the accident to your own insurer and they will handle your claim in the usual manner but you will not lose your NCB. So the repair cost is actually borne by your own insurance company.
Alternatively, you may chose to report the claim to the third party insurer who will then approve and " seem" to pay for repairs to your car. If the repairs is less than RM 10k, the agreement allows the third party to approve repairs without reference to your insurance company. If it is more than RM 10k, then all documents are actually sent to your own insurance company who will study the documents and will let the third party insurance company know how much to approve. Later, the third party insurance company will recover the amount paid for the repairs to your car from your own insurer as a result of the Knock for Knock agreement.
Why do we have knock for knock agreement - this is so that insurance companies do not sue each other in court trying to determine whose customer is at fault otherwise the only people who makes money will be the lawyers.
The knock for knock agreement does not apply to cars which are used for hire and reward ie buses and taxis and as suc if you have an accident with them, you can only make a claim directly from the bus/taxi insurance company. In this case, there will be no recovery from your own insurance company once the third party company pays your claim.
It is quite complicated and I hope readers understand what I am trying to say.
On the questions regarding betterment, this is something which came in about 6 to 7 years ago if I remember correctly.
The betterment rate which is approved by the Central Bank is as follows :
less than 5 years old - no betterment
6 years - 15% betterment
7 years -
8 years - ??
9 years - ??
10 years - 40% betterment
Please note that I cannot remember the exact percentage but 40% is the maximum - check with your agent.
The car owners therefore have to contribute to the cost of a new part or alternatively, the car owner can opt for used part or oem part instead of original parts - the choice is entirely up to the car owner.
Why did the Central Bank allow this - most car parts have a certain life span and if the car owner is given a new part, he will have the benefit of new life span of the new part. Hence the car owner is now asked to contribute if they opt for a new part.
Personally, I agree with the concept except that it can be unfair sometimes as some parts has no known life span eg your glass window will be there forever so one can argue that betterment should not be applied.
Before the Central Bank allowed insurance companies to apply betterment, the workshops were making a lot of money when insurance companies approved repairs based on new parts but they use used parts. The motor insurance industry started making losses and this is one of the steps the Central bank used to help insurance comanies survive.
Remember that in Malaysia, motor insurance is regulated and insurance companies cannot raise prices to offset losses ( unlike countries like Singapore and Hong Kong where it is a free market )
The betterment rate which is approved by the Central Bank is as follows :
less than 5 years old - no betterment
6 years - 15% betterment
7 years -
8 years - ??
9 years - ??
10 years - 40% betterment
Please note that I cannot remember the exact percentage but 40% is the maximum - check with your agent.
The car owners therefore have to contribute to the cost of a new part or alternatively, the car owner can opt for used part or oem part instead of original parts - the choice is entirely up to the car owner.
Why did the Central Bank allow this - most car parts have a certain life span and if the car owner is given a new part, he will have the benefit of new life span of the new part. Hence the car owner is now asked to contribute if they opt for a new part.
Personally, I agree with the concept except that it can be unfair sometimes as some parts has no known life span eg your glass window will be there forever so one can argue that betterment should not be applied.
Before the Central Bank allowed insurance companies to apply betterment, the workshops were making a lot of money when insurance companies approved repairs based on new parts but they use used parts. The motor insurance industry started making losses and this is one of the steps the Central bank used to help insurance comanies survive.
Remember that in Malaysia, motor insurance is regulated and insurance companies cannot raise prices to offset losses ( unlike countries like Singapore and Hong Kong where it is a free market )
There are many comments on why insurance companies do not pay out in full in the event of constructive total loss or theft of a car.
Constructive total loss means the car is beyond repair ie it is not worthwhile to repair the car.
Insurance is based on the principle of indemnity ie it aims to put a person in the same financial position after a loss as he was in before a loss.
Say your car is insured for a period of one year from 1st Jan 2008 to 31st Dec 2008 for RM 100k. Assume the market value on 1st Jan 2008 is RM 100k ( market value is the price which the car will fetch in the open market )
If it is stolen on 3rd Jan 2008, your insurance company will probably pay RM 100k.
But if the car is stolen on say, 25th Dec 2008, the insurance will pay the market value at the time of loss.
Why ? Because the principle of indemnity comes in. If the car was not lost on 25th Dec 2008, the car will not be able to fetch RM 100k in the open market. It will probably fetch about about say, RM 85k and that is the value that the insurance company will offer as settlement.
So the car owner is at exactly the same financial position that he would have been in before the loss.
Of course the general public can get the wrong perception because :
1. there are some insurance companies ( definitely not all insurance companies ! ) who wil try to offer one or two thousand less than actual market value in an effort to control claims cost
2. market value is very subjective and is always subject to argument
However, nowadays, the motor insurance in Malaysia has changed a bit. In UK, it is a standard policy condition for some companies that if a new car is stolen or treated as total loss, the insurance company will pay the actual purchase price of the vehicle when new.
About 3 years ago, this was first introduced by an insurance company in MY as a supposedly innovation in an effort to differentiate itself from competitors. It was first offered to Nissan and then to Perodua and subsequently other non theft target vehicles.
I said "supposedly" because the idea came from the UK policies -why reinvent the wheel .......
Soon all insurance companies followed and the agreed value clause for new vehicles has now become common for new cars. This applies only to first year. For second year, it goes back to market value.
What are the cars makes that will currently pay you the sum insured is lost within one year from new purchase ?
1. Nissan/Renault
2. Perodua
3. Mercedes Benz ( if purchased from C&C ) This applies onyl for CTL and not for theft as Mercedes is a theft target vehicle. However, if installed with i mob immobiliser, it will apply to theft as well
4. Some dealers for Proton, Hyundai, Kia will offer as well
5. Jaguar @ Pavillion will offer this soon provided loan and insurance is taken via Affin Bank
6. There are others that I cannot recall at the moment.
Hope this helps.
Constructive total loss means the car is beyond repair ie it is not worthwhile to repair the car.
Insurance is based on the principle of indemnity ie it aims to put a person in the same financial position after a loss as he was in before a loss.
Say your car is insured for a period of one year from 1st Jan 2008 to 31st Dec 2008 for RM 100k. Assume the market value on 1st Jan 2008 is RM 100k ( market value is the price which the car will fetch in the open market )
If it is stolen on 3rd Jan 2008, your insurance company will probably pay RM 100k.
But if the car is stolen on say, 25th Dec 2008, the insurance will pay the market value at the time of loss.
Why ? Because the principle of indemnity comes in. If the car was not lost on 25th Dec 2008, the car will not be able to fetch RM 100k in the open market. It will probably fetch about about say, RM 85k and that is the value that the insurance company will offer as settlement.
So the car owner is at exactly the same financial position that he would have been in before the loss.
Of course the general public can get the wrong perception because :
1. there are some insurance companies ( definitely not all insurance companies ! ) who wil try to offer one or two thousand less than actual market value in an effort to control claims cost
2. market value is very subjective and is always subject to argument
However, nowadays, the motor insurance in Malaysia has changed a bit. In UK, it is a standard policy condition for some companies that if a new car is stolen or treated as total loss, the insurance company will pay the actual purchase price of the vehicle when new.
About 3 years ago, this was first introduced by an insurance company in MY as a supposedly innovation in an effort to differentiate itself from competitors. It was first offered to Nissan and then to Perodua and subsequently other non theft target vehicles.
I said "supposedly" because the idea came from the UK policies -why reinvent the wheel .......
Soon all insurance companies followed and the agreed value clause for new vehicles has now become common for new cars. This applies only to first year. For second year, it goes back to market value.
What are the cars makes that will currently pay you the sum insured is lost within one year from new purchase ?
1. Nissan/Renault
2. Perodua
3. Mercedes Benz ( if purchased from C&C ) This applies onyl for CTL and not for theft as Mercedes is a theft target vehicle. However, if installed with i mob immobiliser, it will apply to theft as well
4. Some dealers for Proton, Hyundai, Kia will offer as well
5. Jaguar @ Pavillion will offer this soon provided loan and insurance is taken via Affin Bank
6. There are others that I cannot recall at the moment.
Hope this helps.
devilsadvocate;327622 said:
Yes, if you want flood cover, you have to pay additional premium at 0.5% of the sum insured of your car ie RM 500 additional premium for a RM 100k car.
Most companies are now offering nil excess for private cars with sum insured less than RM 300k.
But this might change soon as the motor insurance industry has gone to loss making in 2007.
As at Dec 2007 for Malaysian motor insurance industry as a whole, for every RM 1 that the insurance company collects as premium, RM 1.15 in total is paid out in terms of claims cost, commission ( standardised at 10%) and management expenses ( about 20% )
This is as a result of the NAP where prices of cars went down and hence the premium has gone down. But cost or repairs ( spare parts and workshop labour ) has gone up.
The situation for the first 6 months of 2008 is even worse and with the recent announcement in petrol prices, this does not help.
However, Malaysians can rest easy as insurance companies cannot increase premiums due to the tariff imposed by BNM. Insurance companies is trying to lobby to the Central Bank to put up a proposal to the Cabinet but in my personal opinion, the cabinet is unlikely to approve in the near future.
turbosnail;292063 said:
If you look at the legal aspect, it is a contractual condition. In usual contracts, both parties are able to negotiate on the terms before signing and if they do not agree, they do not have to enter into a contractual relationship.
However, in Malaysia, there is no chance for people to negotiate on the motor insurance contract ie policy as motor insurance in tariff ie the premiumis regulated and so is the policy terms and conditions - all insurance companies in Malaysia issues the same policy terms and conditions.
It can be deemed to be unfair to you that you have no choice but the bright side is that the premium that you pay is also controlled and insurance companies cannot increase the premiums as and when they like, even if the risk is bad.
astroboy
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ozone;336923 said:
I kena one case in Feb08, a motorbike knock me and if I do ODKFK, I would lose my NCB, the repair was about RM5,500. I had to pay first and claim direct 3rd party to save my NCB.. what a bummer..
The bike rider kena summon, not my fault and I was stationary when being knocked!..
Can someone shared some light on this matter? Some say no such thing, some say it applies to all insurance company. It has something to do with body injury of the motorbike rider who knock me, despite he's at fault, he can still claim my comprehensive insurance for sustaining injury in an accident involving my car, that's why I lose NCB.. farnee insurance law.. :stupid:
astroboy;337005 said:I kena one case in Feb08, a motorbike knock me and if I do ODKFK, I would lose my NCB, the repair was about RM5,500. I had to pay first and claim direct 3rd party to save my NCB.. what a bummer..
The bike rider kena summon, not my fault and I was stationary when being knocked!..
Can someone shared some light on this matter? Some say no such thing, some say it applies to all insurance company. It has something to do with body injury of the motorbike rider who knock me, despite he's at fault, he can still claim my comprehensive insurance for sustaining injury in an accident involving my car, that's why I lose NCB.. farnee insurance law.. :stupid:
Here's the part in your motor insurance policies which deals with this :
" In the event that your vehicle is collided .....................
Provided always that such third party vehicle is insured, identifiable and/or not a vehicle used for carriage of passengers for hire or reward (for example taxis, hire cars,
public buses, school buses and factory buses for hire ), not a vehicle insured by a non malaysian insurer and there is no personal injury claim involved"
So clearly, if there is third party bodily injury involved, your insurance company will not acept a claim under ODKFK and your NCB will be forfeited.
Why ? In most cases, if the case goes to court, judges are more sympathetic to injured victims and an element of contributory negligence might be declared - so it might be deemed as partial fault.
Sad but true.
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