Introduction
A lot of car owners think, “The higher my insured value, the better the protection.”
But in reality, if your insurance coverage doesn’t match your car’s actual market value, you could face serious issues when making a claim. There are two common situations — overinsured (too much coverage) and underinsured (too little coverage).
Both can make you lose money, just in different ways.
1. What Do Overinsured and Underinsured Mean?
Overinsured (Excess Coverage)
This happens when your insured value is higher than your car’s actual market value.
Example: your car is worth RM40,000 but insured for RM60,000.
Even though you pay higher premiums, your payout will still follow the market value — not the insured value. That extra premium you paid? Basically wasted.
Underinsured (Insufficient Coverage)
This happens when your insured value is lower than the car’s actual worth.
Example: your car is worth RM50,000 but insured for only RM35,000.
If a major accident occurs, you won’t get full compensation — because the insurer pays based on your coverage ratio, not the total loss.
2. Effects on Insurance Claims
Both situations directly affect your compensation — whether it’s for an accident, theft, or total loss.
If Overinsured:
- You pay unnecessarily high premiums.
- Compensation is still based on market value.
- No added benefit even if you paid more.
If Underinsured:
- Compensation is reduced proportionally (based on your insured ratio).
- For example, if your car is worth RM50,000 but insured for RM25,000 — you’re only 50% covered.
- So for a RM10,000 loss, you’ll only receive RM5,000.
3. How to Avoid Being Overinsured or Underinsured
To make sure you’re not in either situation, follow these steps when renewing your policy:
- Check your car’s current market value via platforms like Bjak before choosing your insured value.
- Opt for Agreed Value if you want a fixed payout that doesn’t depend on market changes.
- Don’t guess — refer to verified data from JPJ or insurance assessors.
- Renew annually, since car value depreciates each year.
4. How Bjak Helps You Get the Right Value
When you enter your vehicle details on Bjak, the system automatically suggests the current market value based on your car’s model and year.
This helps you:
- Avoid being overinsured or underinsured,
- Pay a fair premium,
- And receive full compensation when you file a claim.
Conclusion
Choosing the right insured value isn’t just about saving money — it determines how much you’ll actually receive when something happens. Don’t try to “save” on premiums now only to lose more later during a claim. Use Bjak to check your car’s latest market value and set the right coverage — not too high, not too low — just right to protect both your car and your wallet.
Read More:
Benefits of Using “Buy Now Pay Later” for Car Insurance
