Navigating the world of car insurance can be daunting, with a myriad of terms and jargon that may leave many policyholders scratching their heads. We’ve previously covered seven important vehicle insurance terms that every car owner should know for easier reference. Click here to check out that post.
We will continue the discussion by shedding light on some essential car insurance terms, for a clearer understanding of the coverages that protect you and your vehicle in various situations. Read on to find out what they are.
Legal Liability to Passengers (LLP)
Legal Liability to Passengers (LLP) is a crucial coverage in auto insurance that safeguards the driver against legal liabilities arising from injuries or damages sustained by passengers during an accident for which the driver is at fault. Also known as LLTP, this coverage helps cover medical expenses, rehabilitation costs, and legal fees associated with passenger claims.
The annual premium for LLP is typically around 25% of the premium for basic third-party insurance. LLP is mandatory for foreign vehicles entering Singapore by land. So, if you’re planning to drive to the island nation, get this coverage from your insurance provider.
Legal Liability of Passengers (LLOP)
Legal Liability of Passengers (LLOP) is another important liability insurance that protects vehicle owners from legal liability taken by a third party for negligence committed by their passengers. For instance, if a passenger opens the door without looking and causes damage to other motorists, LLOP coverage comes into play.
In Malaysia, the annual premium for LLOP is a nominal RM7.50 per annum per vehicle. LLOP and LLP are often confused by many people since they sound similar to one another.
No-Claim Bonus (NCB)
No-Claim Bonus (NCB) is a discount offered by insurance companies on vehicle insurance premiums. Regulated by Persatuan Insurans Am Malaysia (PIAM), NCB serves as a reward and incentive for vehicle owners with a history of safe driving.
The NCB rate for new vehicles starts at zero in the first year and accumulates over time as the policyholder avoids making claims. It is worth noting that No-Claim Discount (NCD) is an interchangeable term with NCB, both denoting the same concept.
Strike, Riot & Civil Commotion (SRCC)
SRCC is a coverage that protects your vehicle from damages caused by events such as strikes, riots, or civil commotion. While these incidents may be rare in Malaysia, having SRCC coverage ensures that your vehicle is safeguarded in case of unforeseen civil disturbances. SRCC is typically offered as an optional add-on coverage by most insurers which you must purchase by an additional premium.
Compensation for Assessed Repair Time (CART)
Compensation for Assessed Repair Time or CART is a unique coverage that can also be seen in the list of optional benefits in car policies. It provides compensation based on the time it takes to repair your vehicle based on an adjuster’s report. This coverage is designed to alleviate the inconvenience and potential financial strain associated with prolonged repair durations. It is especially useful when repair times take longer than promised.
Key coverage in car insurance
Understanding car insurance terms is crucial for making informed decisions about coverage that suits your needs. Whether it’s protecting your passengers, mitigating legal liabilities, or enjoying discounts for safe driving, being well-versed in these terms empowers you as a policyholder.
As you navigate the complex landscape of auto insurance, remember that knowledge is your best ally in ensuring comprehensive protection for you and your vehicle. Remember to follow our blog for more useful information like this one.
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