Many Malaysian car owners think of car insurance and roadtax as one thing. Both are renewed around the same time each year, and you often pay for them in one sitting. In reality, they are two separate things with two different jobs.
Car insurance protects you financially if your car is involved in an accident, stolen or damaged. Roadtax, officially called the Lesen Kenderaan Motor (LKM), is the licence from the government that allows your vehicle to be used on public roads. This guide explains how they differ, how they are linked and why you need both.
What is car insurance?
Car insurance is a contract between you and an insurance company or takaful operator. You pay a premium (or a contribution, for takaful), and in return the insurer agrees to pay for certain losses listed in your policy. Insurers and takaful operators in Malaysia are licensed and regulated by Bank Negara Malaysia.
Motor insurance is not optional. Bank Negara Malaysia explains that when you own a motor vehicle, you need a motor insurance policy or takaful certificate as required by law. There are three main types of cover:
Third Party: covers your liability to other people for injury, death, or damage to their property. It does not pay for damage to your own car.
Third Party, Fire and Theft: includes third-party cover, plus loss or damage to your own car caused by accidental fire or theft.
Comprehensive: includes all of the above, plus loss or damage to your own car caused by an accident.
None of these covers liability to your own driver and passengers by default. Passenger cover can usually be added for an extra premium, and other add-ons such as windscreen or flood cover depend on the insurer and the plan you choose.
What is roadtax?
Roadtax is a licence fee you pay to the Road Transport Department (JPJ). Once it is paid, your vehicle is licensed to be used on public roads for the period you have chosen. Without a valid LKM, your car cannot be driven legally, even if it has insurance.
The amount you pay is not the same for every car. It mainly depends on:
Engine capacity: larger engines (measured in cc) pay higher rates. Electric vehicles are charged by motor power in kW instead.
Where the vehicle is registered: rates in Sabah and Sarawak are lower than in Peninsular Malaysia.
Ownership type: cars registered under a company pay higher rates than cars owned by individuals.
Vehicle type: cars, motorcycles and commercial vehicles have different rate structures.
Many private car owners can now use the digital LKM, which is shown in the MyJPJ app, instead of a sticker on the windscreen. Our guide to JPJ digital roadtax (e-LKM) explains how it works and when you may still want a printed copy.
Car insurance vs roadtax at a glance
Aspect
Car insurance
Roadtax (LKM)
What it is
A contract with an insurer or takaful operator
A vehicle licence issued by JPJ
Main purpose
Financial protection against covered losses such as accidents, theft and third-party claims
Legal permission to use your vehicle on public roads
Who you pay
An insurer or takaful operator, directly or through an agent or online platform
The government, through JPJ or an approved channel
Overseen by
Bank Negara Malaysia
JPJ
How the price is set
Car value, type of cover, add-ons and your no-claim discount (NCD)
Engine cc or kW, registration region, ownership type and vehicle type
Usual period
Usually 12 months
6 months or 12 months for private vehicles
Proof you hold
Policy schedule or certificate of insurance
Digital LKM in MyJPJ, or a printed LKM
How car insurance and roadtax are linked
The two are separate, but one depends on the other. According to JPJ’s LKM renewal guide, your vehicle must have insurance coverage for the full period of the LKM you are applying for. In simple terms, you cannot renew your roadtax without active insurance.
This is also why the length of your insurance matters. For example, if your insurance only has a few months left, you may not be able to renew your roadtax for a full year until your insurance is renewed as well.
Having one does not replace the other, though. Valid insurance does not make up for expired roadtax, and valid roadtax does not mean you are insured. If either one lapses, you are no longer driving legally.
Do you have to renew both at the same time?
No. Many people renew both in one go because it is convenient, but you can renew your insurance first and your roadtax later, as long as the insurance covers the roadtax period you apply for. We explain this in more detail in Roadtax vs insurance renewal: can you renew separately?.
Why you need both
Each one protects you from a different problem. It helps to look at what happens when one of them is missing.
Insurance has lapsed: you will not be able to renew your roadtax, and you can face legal action for driving an uninsured vehicle. If you cause an accident, you may have to pay the other party’s costs and your own repairs yourself.
Roadtax has expired: your car is not licensed for the road, so you can be fined or face other enforcement action by JPJ or the police, even if your insurance is still active. Read more in what happens if you drive with expired road tax.
A simple way to remember it: insurance protects your money, while roadtax gives your car the legal right to be on the road.
How to renew car insurance and roadtax
You no longer need to queue at a counter for either one. A common order looks like this:
Check the expiry dates of your insurance and roadtax. You can see your LKM expiry date in the MyJPJ app.
Compare car insurance quotes, choose your cover and pay for your policy.
Make sure your new insurance is active and covers the roadtax period you want, either 6 or 12 months.
Renew your roadtax through JPJ, MyJPJ, Pos Malaysia or an approved online platform such as BJAK.
Check that your new LKM shows up in MyJPJ.
On BJAK, you can compare car insurance from several insurers and renew your roadtax on the same platform, so both are sorted in one session.
If your roadtax has been expired for more than three years, JPJ requires a PUSPAKOM inspection before it can be renewed, so plan for extra time.
Keep both valid all year
Car insurance and roadtax are easy to mix up, but they are not interchangeable. Insurance covers your financial risk, and roadtax is your vehicle’s legal licence to use the road. You need both, and your roadtax can only be renewed while your insurance is active.
Set a reminder a few weeks before either one expires so you have time to compare prices and renew without stress.
No. Car insurance is a contract with an insurer or takaful operator that pays for covered losses such as accidents and theft. Roadtax (LKM) is a licence from JPJ that allows your vehicle to be used on public roads. You need both.
Can I renew roadtax without car insurance?
No. JPJ requires your vehicle to have insurance coverage for the whole period of the LKM you apply for, so you must renew your insurance first if it has expired or is about to expire.
Is my car insured if my roadtax is still valid?
Not necessarily. Roadtax and insurance have separate expiry dates. A valid LKM does not mean your insurance is active, so check both dates.
What is the most basic type of car insurance?
Third-party cover is the most basic type of motor insurance. It covers your liability to other people but does not pay for damage to your own car. Third Party, Fire and Theft and Comprehensive plans give wider protection.
Why is my roadtax cheaper or more expensive than my friend's?
Roadtax depends on your car’s engine capacity (or motor power in kW for electric vehicles), where it is registered, whether it is owned by an individual or a company, and the vehicle type. Insurance premiums are based on different factors, such as your car’s value, cover type and NCD.
Do I still need a physical roadtax sticker?
Eligible private vehicle owners can use the digital LKM shown in the MyJPJ app instead. You can still request a printed copy when you renew if you need one.
Nabil Farhan· · 6 min read
