Introduction
Many car owners wonder why their insurance premium differs even when their cars look similar. The answer: every insurer assesses risk differently.
This article breaks down the five key factors that influence your car insurance premium in Malaysia — so you can understand what drives the cost and how to control it.
1. Vehicle Age & Type
The older the car, the higher the risk of damage. Car models also plays a major role — imported and luxury cars usually have higher premiums due to costly parts and repairs.
Tip: For older cars, consider a Third Party, Fire & Theft plan to reduce your annual cost.
2. Residential Location & Parking Area
Your house address may affect your premium, urban areas in te city tend to have a higher risk due to increased accidents and theft cases in the area compared to village areas.
Example: Parking your vehicle in gated or covered areas may be reduced if you declare to your insurer..
3. Driver’s Age & Record
Insurance companies view younger drivers (under 25) or new license holders as higher risk. Your past records — such as traffic summonses or claims history — also matter.
The more claims you’ve made, the higher your next premium will be.
Tip: Avoid small, unnecessary claims (like minor scratches) to keep your record clean and maintain your NCD discount.
4. Type of Coverage (Comprehensive vs Third Party)
Your chosen plan directly affects your premium. Comprehensive insurance offers the widest protection, including own damage, but it’s the most expensive. Third Party plans are cheaper and best for older vehicles.
| Coverage Type | Protection | Estimated Cost |
| Comprehensive | Own damage, third party, theft | High |
| Third Party | Third party only | Low |
5. NCD (No Claim Discount)
The most important factor — your NCD. Each claim-free year increases your discount (up to 55%). Many drivers don’t realise this can save hundreds of ringgit yearly.
Example: If your base premium is RM1,000, with a 55% NCD you’ll only pay RM450.
Conclusion
Now you understand the car insurance premium factors that determine how much you pay.
With a clean driving record, high NCD, and the right coverage choice, you can significantly cut your premium cost. To check your actual rate, compare instant quotes on platforms like Bjak, MyEG, or directly from your preferred insurer.
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