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Insurance FAQ
Insurance Introduction

Car Insurance Introduction

Car insurance provides financial protection in the event of a traffic accident that causes physical damage or injury. Car insurance is compulsory in Malaysia with the minimum requirement being the third-party insurance. Without a car insurance policy, the road tax could not be renewed for your car.

Types of Car Insurance in Malaysia

There are three main types of car insurance in Malaysia:

  • Third party insurance
  • Third party, fire, and theft
  • Comprehensive

Third Party Insurance

In the event of injury or physical damage caused by a traffic collision where you are at fault, your insurance is used to compensate the financial losses caused to other party involved. Hence the name third party insurance. A police report will have to be made prior to making an insurance claim. 

The third-party insurance is the most basic form of car insurance that only compensates the damages of the other party involved. Your personal damages are not covered.

Third party, fire, and theft insurance

“Third party, fire, and theft insurance” is a step up from the basic third-party insurance with fire and theft insurance included. As the name suggests, damage to your own car in a collision is still not covered.

Comprehensive insurance

Comprehensive insurance is the most complete form of car insurance. In addition to the coverage provided by “third party insurance” and “third party, fire, and theft insurance”, damage to your own vehicle is also covered by the insurance policy.

Factors affecting car insurance premium

The insurance premium for your car will be affected by several factors like:

  • Car gross market value
  • Type of car insurance
  • Car engine displacement
  • Your location

The car’s depreciation will reduce its gross market value, a higher insurance coverage will incur a higher premium, and a bigger engine displacement incur a higher premium. 

Your location will determine the risk of an incident, thus affecting the insurance premium. All of these factors are assessed when you use our insurance calculator.

No-claim discount (NCD)

A no-claim discount is a discount that you will receive if the car insurance has never been claimed. The car is assessed to be at a lower risk of an incident. The NCD starts at 25% after one year and increases up to 55 % after 5 years of no claims.

Coverage Duration Discount
1st year 25%
2nd year 30%
3rd year 38.33%
4th year 45%
5th year 55%

Insurance add-ons

On top of the three insurance types mentioned earlier, add-on car insurances can also be subscribed to such as:

  • Windscreen insurance
  • Driver insurance
  • Audio system insurance
  • Special Perils) (Natural disaster) insurance
  • Strike, riot, and civil commotion insurance
  • Legal liability for Passenger Act of Negligence

Different drivers will have different insurance needs. With a good insurance package, you can have peace of mind in case of any unexpected incidents.


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