Understanding Auto Insurance in Malaysia

What is Auto Insurance?

Auto insurance is designed to protect drivers financially against the risk of being involved in a car accident and having to pay a massive amount of money over the physical damage and vehicle repair costs.

 

There are three types of car insurance available:

  1. Third-party cover

Third-party coverage is the most basic policy that any vehicle would require to be able to drive legally on the road. In the insurance world, the “first party” is the driver, the “second party” is the auto insurance company and the “third party” is everyone else.

 

This insurance only covers the third party but not you and your vehicle. It insures you any injuries or deaths caused to the third party, as well as loss or damage to the third party property caused by your car.

 

Since this coverage only insures the third party, therefore it’s the cheapest one among the other three types of insurance plan.

auto insurance

  1. Third-party, fire and theft cover

A third-party, fire and theft policy is similar to the third-party coverage. It does not only includes you against claims from third parties from injury, death, and loss or damage to their vehicle, but it also insures if your vehicle is damaged in a fire or stolen.

 

This insurance policy is pricier than the Third-Party coverage but more affordable than a Comprehensive coverage.

 

  1. Comprehensive cover

A Comprehensive auto insurance policy covers all of the above and more. With this coverage, you get to enjoy the same coverage as in a Third-party, fire and theft policy, but with the added coverage of damages to the first party.

 

This policy is the most popular in the market especially if you own a relatively expensive car, or for any drivers who would want to insure their vehicle against any unforeseeable events fully.

Conclusion

With auto insurance, you’ll feel more secure while driving your vehicle, knowing that you and vehicle are protected from the financial catastrophe that could result anytime from any accidents.

 

On top of that, you’re able to enjoy cheaper auto insurance premium each year if you don’t claim from the insurance company based on the No Claim Discount (NCD) system. Visit https://www.aig.my/personal/auto-insurance now to learn more about AIG auto insurance!