Ever wondered why the price of a car policy varies from person to person and what are the factors that insurance companies use to determine your rates?
Understanding these key elements can help you make informed decisions and potentially save some cash on your next policy. Get ready to unravel the secrets behind those insurance price tags!
Market value of the car
The cost of your car insurance premium is usually based on how much your car is worth in the market. If your car has a higher market value, the insurance coverage will be higher too.
For instance, a brand-new BMW 330i 2023 valued at RM317,800 will have higher insurance coverage compared to a new Honda Civic valued at RM166,500.
Keep in mind that as the market value of your car decreases over time, it will also lead to a decrease in the value of your car insurance. So, as your car gets older, the insurance cost will likely go down too.
Car manufacturing year
The age of your car affects how much you pay for insurance. If your car was made in 2018, your insurance will likely cost less than if it was made in 2022. In simple terms, older cars have cheaper insurance compared to newer ones.
No Claim Discount (NCD)
NCD is a key factor that affects how much you pay for car insurance premiums. It’s a discount given by the insurance company if you haven’t made any claims in a year. The NCD rate ranges from 0 to a maximum of 55%. The higher your NCD value, the lower the cost of your insurance.
Type of insurance
The type of insurance you pick can influence how much you pay for car insurance. Comprehensive insurance, which covers a wider range of incidents, tends to cost more compared to basic third-party insurance.
If you have a new car or a car less than 10 years old (especially if it’s financed), comprehensive insurance is usually mandatory. On the other hand, if you have an older car that’s over 15 years old, it’s recommended to consider third-party, fire, and theft insurance for extra vehicle protection.
Location
The cost of auto insurance is usually higher in cities compared to rural areas. Moreover, insurance prices tend to be higher in the Peninsula compared to Sabah and Sarawak. This is because the value of cars and the level of risk are greater in Peninsular Malaysia than in Sabah and Sarawak.
Driving record
Your driving history plays a big role in determining how much you’ll pay for insurance premiums. If you have a clean record and drive safely, your insurance price will be lower.
On the other hand, if you’re a reckless driver with a history of traffic offences and accidents, insurance companies see you as high risk. They’ll charge you more because they have to take on a greater risk by insuring you.
Occupation
If you use your car a lot for work, especially to go to different project sites, your insurance price will likely be higher. This is because the chances of accidents and damage to your car are greater compared to those who only use their car for personal reasons.
Find the best car policy!
As a customer, finding affordable insurance is important to you. Different insurance companies or takaful providers offer varying prices and benefits.
Before committing to any car insurance policy, it’s crucial to compare options and make an informed decision. Take the time to do your research and find the coverage that best suits your needs and budget.
Bjak is one of Malaysia’s biggest insurance comparison sites, with more than 10 insurance brands to choose from. Get your free insurance quote at Bjak today!
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