Understanding the intricacies of car insurance is crucial for every vehicle owner, especially when it comes to liability coverage. Among the various elements of liability insurance, two important acronyms stand out: LLP (Legal Liability to Passengers) and LLOP (Legal Liability of the Owner and/or the Driver to Third Parties).
In this guide, we’ll delve into the significance of these terms within car insurance policies, shedding light on their roles, coverage, and how they safeguard both drivers and passengers in the event of unforeseen circumstances.
What is LLP?
Legal Liability to Passengers (LLP), also known as LLTP by some, in auto insurance refers to coverage that protects the policyholder (the driver) against legal liabilities arising from injuries or damages sustained by passengers in the insured vehicle during an accident for which the policyholder is at fault.
If the driver is found responsible for an accident that results in injuries or harm to passengers, the LLP coverage helps cover the medical expenses, rehabilitation costs, and, if applicable, legal fees associated with claims made by the passengers or their representatives. The annual premium for LLP coverage is usually 25% of the premium for basic third-party insurance.
What is LLOP?
Legal Liability of Passengers (LLOP), is another type of liability coverage that protects the vehicle owner from legal liability taken by a third party for negligence committed by their passengers. For example, your passenger opened the door without looking and caused damage to other motorists. The annual premium for LLOP in Malaysia is only RM7.50 per annum per vehicle.
Importance of liability insurance
Liability insurance holds critical significance for drivers, primarily due to legal obligations, financial protection, and overall peace of mind. Although LLP and LLOP coverage is not mandatory in Malaysia, jurisdictions outside like Singapore, mandate liability coverage as a legal requirement. Failing to carry this insurance can lead to penalties and legal consequences. Thus, having liability coverage ensures compliance with the law and serves as tangible proof that you can cover the costs of injuries or damages in an at-fault accident.
Besides, liability insurance offers great financial protection. This coverage addresses the expenses associated with injuries and property damage for which you may be held responsible. Without liability coverage, you risk personal assets, such as savings and property, becoming vulnerable to the financial repercussions of an accident. This coverage acts as a safeguard, offering a crucial layer of financial security in unpredictable situations on the road.
Common misunderstanding
There is a common misconception that LLP and LLOP are insurance requirements solely for travel to Singapore. This belief is fueled by Singapore’s mandate for foreign vehicles to have LLP and LLOP for entry. In reality, this insurance extends beyond Singapore and provides coverage even while in Malaysia. Although it adds a slight increment to your motor insurance premium, it offers comprehensive coverage and benefits wherever you travel.
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