Car insurance is meant to help you financially should you run into an untoward event. However, note that not all car insurance policies will allow you to file a claim in every circumstance. Your coverage will vary depending on the type of car insurance policy that you purchase.
What are the situations that insurance companies and Takaful operators do not cover? Read on as we break down the details for you.
Situations not covered by car insurance policy
The followings are the type of situations that are not entitled for insurance claim:
Damage due to natural disasters
The insurance providers do not cover damage against natural disasters. You need to purchase additional special perils coverage when renewing comprehensive insurance.
Special perils coverage is additional coverage for car damage caused by natural disasters. Examples are floods, storms, landslides, or fallen trees, depending on your plan.
The premium usually will take up about 0.5% of the sum insured. However, the amount will vary across insurance companies and Takaful operators.
Total loss
A car is considered a total loss if the damage is beyond repair.
Say if you cause an accident that causes your vehicle to suffer total damage, your insurer will not pay the balance of your car loan.
They will only pay compensation for the value of your car at market price. The amount is usually lower than the loan balance. This is due to the vehicle depreciation rate factor as well as the interest rate charged by the bank.
*Note: This case applies to those who buy cars using bank loans.
Injuries or death
Injured or died due to road crashes?
To your knowledge, car insurance does not offer to cover your injuries or deaths caused by road accidents. It only covers the third party’s injury or death. However, what if you are not the party at fault for causing the accident? Do not worry because the third party will compensate you using their policy.
Some insurance plans offer personal accident coverage like Takaful Ikhlas. On the other hand, you may also consider purchasing medical insurance to cover your treatment bills at the hospital as an alternative.
Damage due to riots
Most insurance policies will cover damages caused neither by riots nor commotions.
You may opt to purchase additional Strikes, Riot, and Civil Commotion (S.R.C.C) add-on coverage on top of your comprehensive coverage. The premium usually will take up around 0.3% of the insured sum.
Car accessories theft
Unfortunately, you cannot claim insurance for lost car accessories. The insurer will not compensate you for the loss or damage of the accessories involved.
However, you may only claim if you have insured the accessories when you renew your insurance with a comprehensive plan.
Car enthusiasts who love to upgrade their car accessories are recommended to purchase additional car accessories coverage. The premium for this additional coverage is 15% of the total accessories covered.
Understand your car insurance policy
Having yourself armed with the knowledge of insurance can help you understand possible confusion in the future. Avoid being complacent, and get adequate protection for your vehicle.
Bjak is one of Malaysia’s largest car insurance comparison sites. Get free quotes at Bjak and renew car insurance and road tax online in just 5 minutes.
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