The General Insurance Association of Malaysia (PIAM) offers a simple 3Cs Guideline to help motor vehicle owners and drivers ensure that they are indeed properly insured.
Consumers are advised to:
1) Complete their motor insurance proposal forms honestly and accurately before signing it.
2) Check their policies upon receipt to ensure the information stated is accurate.
3) Contact their insurers if the information in their policies is inaccurate or they need to update the information in their existing policies.
Whether it is buying a new or renewing an existing motor policy or when submitting a claim, PIAM's Executive Director C.F. Lim said that it is critical that consumers provide the following information accurately:
* New IC number of Policyholder/Driver
* Make and Model of Vehicle
* Year of Manufacture of Vehicle
* Capacity of Vehicle
* Gender of Policyholder/Driver
* Age of Policyholder
* Residential Address of Policyholder/Location where Claim Occurred
Lim also advises consumers to never sign blank proposal forms. The information contained in the proposal forms the basis of the insurance contract and, if not accurate, may result in the contract being repudiated in event of a claim. This is an important responsibility on the part of the consumer in ensuring that they receive the cover that they pay for.
Consumers are also advised to check through their policies upon receipt to ensure that the information provided in the proposal form have been correctly transferred to the policy document. The policy is the official contract between the consumer and the insurance company and hence, must be accurate and updated.
Furthermore, consumers, to safeguard their own interest, must report any discrepancies in either their proposal forms or the policy documents to their insurers.
"There have been cases where the consumers have had their cars stolen and filed their claims with their insurance companies only to discover that they have third party and not comprehensive insurance covers,"
says Lim.
Besides strongly urging consumers to provide accurate information and checking their documents to ensure that they receive the cover that they have paid for, Lim says that PIAM also collates this data from its member companies for statistical analysis so as to continue its work towards a fairer and more equitable motor premium rating. The information is also used in identifying and combatting incidences of motor insurance fraud.
PIAM is the national trade association of all the licensed general insurance companies in Malaysia. Currently, PIAM has 54 member companies.
You have just bought your own set of wheels and can't wait to "get your motor running" on our spacious highways. Before you rev that engine up and hit the road, the law requires drivers of motor vehicles to buy motor insurance.
The latest motor accident statistics reveal that over 215,000 motor vehicles were involved in accidents in 1997, a 14 per cent increase from the previous year. Moreover, with more than one out of four Malaysians owning either a motorcycle or a motorcar, it is no wonder that motor insurance is a mandatory requirement.
It is also for this reason many of us do not comprehend the role motor insurance plays in protecting us against a loss or accident which may result in serious damage to our motor vehicles or injury to another person. When we purchase a motor insurance, we are in fact protecting our investment, which, at today's prices, is probably the second most valuable asset after our home.
How do we receive protection from our motor insurance?
To receive this protection, we, as policy holders, pay a premium to our appointed insurer. The insurer will then accumulate all premiums collected into a fund which is then used to compensate any policyholder who is unfortunate enough to suffer a loss from a motor accident. Thus, a loss is paid from the premiums made by the unfortunate policyholders and by all the other policyholders who have not met with an accident.
What are the types of motor insurance covers available?
Choosing the right insurance policy is much like choosing the right motor vehicle. It is required to fit our individual needs and lifestyle but at the same time be within our budget. Although, the Road Transport Act 1987 requires us to have a minimum third party liability coverage, other types of coverage are usually optional.
The key to finding which coverage is best for you involves learning about the three types of motor insurance covers in Malaysia. They are the 'Act Only', 'Third Party' and 'Comprehensive.'
Act Only
The Act Only motor insurance policy provides the minimum cover required by the law, thus giving rise to the name. Under this Act, drivers of motor vehicles have to buy motor insurance to ensure that drivers can meet their liabilities if they injure or cause the death of other people in an accident. Act Only policies are rarely purchased as the insurance protection is quite limited.
Third Party
Third Party motor insurance is wider than 'Act Only' insurance. Besides giving cover against death and injury to third parties, it provides protection against other legal liabilities such as damage to the property of a third party (usually somebody else's car or motorcycle or a neighbour's gate) and certain specified legal costs.
Under the Third Party cover, a policyholder may opt to include protection for loss or damage to own vehicle due to fire or theft only (known as Third Party Fire & Theft). However, most policyholders have found it is more cost-effective and worthwhile to pay a little bit more and be protected under the Comprehensive motor insurance policy instead.
Comprehensive
While Comprehensive motor insurance policy is the widest form of cover available, it does not provide cover for every conceivable type of risk. In addition to that covered in Act Only and Third Party motor insurance, the Comprehensive insurance policy also gives a number of other types of protection including loss or damage to the motor vehicle as a result of fire or theft. More importantly, this policy covers accidental damages to the insured's own vehicle. This additional cover enables the vehicle owner to have his vehicle repaired, reinstated or replaced in case of accidental damage or loss.
On top of these three main categories of motor insurance policies, other additional coverage are available for:
1) Breakage of glass in windscreens or windows
2) Floods, landslide, landslip or other convulsion of nature
3) Legal liability of passengers for acts of negligence (such as the passenger opening his car door and causing an accident with an moving vehicle)
4) Use of private cars for tuition purposes (such as teaching a novice driver how to drive using one's private car)
Car owners are advised to enquire with their agents or insurers on these additional coverage and others as these usually involve additional premiums.
What are the steps to take when making an accident claim?
If an accident occurs, you must follow certain procedures to protect yourself.
Firstly, you must stop your vehicle and exchange particulars with all the other people involved in the accident. In particular, you should:
1) Obtain name(s) and address(es) of other driver(s) involved.
2) Note their vehicle registration number(s) and make of vehicle.
3) Ask for the name of their insurers and their policy or certificate number.
4) Note names and address of independent witnesses and make a rough diagram of the accident.
5) It is your duty to produce your Certificate of Insurance when required to do so by the police.
6) If this information is not available at the scene of the accident, you will be required to produce it to the police within five days.
7) If there is injury to any person or damage to another vehicle, or other property, give your name and address of the owner of the vehicle you are driving and its registration number to anyone who has reasonable grounds of wanting them.
8) Do not discuss whose fault it was as this may create difficulties for your insurers in their handling of your claim. In particular, DO NOT ADMIT LIABILITY even if you think you are in the wrong. It not for you to determine this. Leave it to the loss adjuster or the court to decide, once all facts of the case and sides of the story are considered.
9) Inform your insurers as soon as possible even if you do not intend to make a claim. This is a condition of your policy.
10) Fill in the insurer's accident report form completely and include any additional relevant information not given in answer to direct questions. It is your legal duty to DISCLOSE ALL MATERIAL FACTS.
Once you have reported an accident and your car has been towed to the nearest police station or panel workshop approved by your insurer, your insurer will send a loss adjuster to assess the damage to your car and identify the circumstances of the accident.
A loss adjuster is a specialist whose job is to find out what really happened and how it happened. He will recommend to the insurer how much to settle a claim for in each particular case.
To take advantage of my Free Road Tax Renewal Reminder Service, click here. Please direct your questions on motor or general insurance to:
Azlan Adnan
Tel: 012-383 1324
E-mail: azlan.aig@gmail.com
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