Introduction
Car insurance in Malaysia is full of myths that have been passed down for years. From misunderstandings about the No Claim Discount (NCD) to confusion over policy coverages, these misconceptions can lead drivers to make costly mistakes when renewing their policy.
In this article, we bust the 10 most common car insurance myths in Malaysia and reveal the absolute truth behind them. Do not let these rumors cost you extra money or leave you under-protected on the road!
The Top 10 Car Insurance Myths Busted
Myth 1: Third-Party Insurance Is Always Cheaper and Good Enough
The Truth: While third-party policies are cheaper upfront, they only cover damage to other people’s vehicles and property. If your car is damaged in an accident or stolen, you have to pay for all repairs yourself. For most drivers, this is a massive financial risk. Learn more about the pros & cons of third-party insurance.
Myth 2: NCD Will Be Lost If You Switch Insurers
The Truth: Your NCD is tied to you (your IC number), not your insurance company! Your NCD is fully protected when you switch insurers to get a better price, as long as there is no gap in your coverage and you have a valid No Claim Certificate. You can safely compare and switch providers every year to save money.
Myth 3: Comprehensive Insurance Covers Absolutely Everything
The Truth: Comprehensive cover is extensive, but it still has exclusions. It does not cover wear and tear, illegal modifications, or accidents caused by driving under the influence. Most importantly, it does not automatically cover flood damage unless you purchase a Special Perils add-on. Read more about having comprehensive insurance explained.
Myth 4: NCD Can Be Shared With Family Members
The Truth: NCD is strictly individual-specific. You cannot transfer or share your NCD with your spouse, children, or siblings, even if they drive your car. However, you can transfer your NCD to another vehicle as long as that vehicle is registered under your own name.
Myth 5: Small Claims Won’t Affect Your NCD
The Truth: Any Own Damage claim or “at-fault” claim will instantly reset your hard-earned NCD to 0%. The only exception is if you make a claim strictly for windscreen damage, provided you purchased the specific windscreen add-on beforehand.
Myth 6: Takaful Insurance is Only for Muslims
The Truth: Takaful (Islamic insurance) is open to everyone, regardless of religion or race. It operates on mutual cooperation, risk-sharing, and Shariah-compliant funds. Many non-Muslims choose Takaful because of its transparent profit-sharing (hibah) features.
Myth 7: All Insurance Companies Charge the Exact Same Price
The Truth: Following the motor tariff liberalization (de-tariffication) by Bank Negara Malaysia, prices are no longer fixed. Each insurer uses its own risk formula. The price for the exact same car can differ by hundreds of ringgit depending on which company you choose. This is why comparing quotes is essential!
Myth 8: Over-Insuring Gets You a Bigger Payout
The Truth: You cannot insure your car for RM100,000 if its market value is only RM60,000. In the event of a total loss or theft, insurers will only pay up to the actual market value (or agreed value) at the time of the claim. Over-insuring just means you are wasting money on higher premiums.
Myth 9: Comprehensive Insurance Pays for Your Personal Injuries
The Truth: Comprehensive car insurance primarily focuses on vehicle damage. It does not automatically cover your medical expenses or provide personal injury compensation for you or your passengers. To get this, you need a Personal Accident (PA) add-on or Medical Liability coverage.
Myth 10: Older Cars Can Only Get Third-Party Insurance
The Truth: While some insurers hesitate to offer comprehensive coverage for cars older than 15 years, it is not impossible. Many companies will still approve comprehensive or at least Third-Party, Fire & Theft (TPFT) policies depending on the car’s condition. You just need to shop around.
Frequently Asked Questions (FAQ)
- Is it true that I lose NCD if I make a claim?
Only if you are at fault. If the other party is at fault (and the police report confirms it), you can make a No-Fault Own Damage (NFOD) claim, and your NCD is completely protected. - Does comprehensive insurance cover flood damage?
No, not automatically. It only covers floods if you have added the Special Perils or Flood Add-On to your policy during renewal. - Can I insure my car for more than its market value?
No. Insurers will only pay up to the market value at the time of the claim. Always insure your car accurately to avoid overpaying.
Related Bjak Guides
For more context on navigating your policy correctly, dive into our guide to NCD rates, explore the pros & cons of third-party insurance, and get comprehensive insurance explained in full detail.
How Bjak Helps
Bjak makes it incredibly easy to compare real quotes from over 10 top insurers simultaneously. This allows you to see the actual price difference between third-party and comprehensive plans across the market.
With full transparency, you can add necessary add-ons, view your accurate NCD, and renew online in minutes without any hidden fees.
Conclusion
Don’t let these common car insurance myths in Malaysia cost you money or leave you under-protected. Always verify the facts before renewing your car insurance.
Compare quotes and renew in minutes on bjak.my — the simplest, smartest way to stay covered at the best price possible!
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Proton Persona Road Tax and Insurance Price in Malaysia (2026)
Road Tax Price in Malaysia 2026 — Full Price List by Engine CC
