Got a scratched bumper, a dented door or a broken headlight after an accident? Before making a car insurance claim, you may wonder whether it is better to claim through your insurer or pay for the repairs yourself.
The answer depends on the repair cost, your No Claim Discount (NCD), your insurance coverage and who was responsible for the accident.
For minor damage, paying out of pocket may be more cost-effective. However, if the repair bill is substantial, making a valid insurance claim could reduce your financial burden, subject to your policy terms and coverage limits.
When Should You Claim Car Insurance?
A car insurance claim can help when repair costs are too high to manage on your own. However, you should understand how a claim may affect your NCD and whether you need to pay any additional charges.
Consider making a claim when:
The damage is extensive: Repair costs run into thousands of ringgit or more.
Important car components are damaged: This may include the engine, safety systems or structural parts.
Another driver is involved: You may be able to claim against the at-fault driver’s insurer, depending on the circumstances.
You cannot comfortably afford the repairs: A valid claim can help cover eligible repair costs.
When Is It Better to Pay for Car Repairs Yourself?
Paying for repairs yourself may be more practical when the damage is minor, especially if you have built up a high NCD.
For example, if fixing a small scratch or dent costs only a few hundred ringgit, compare the repair bill with the potential increase in your next insurance renewal cost.
However, do not base your decision on repair costs alone. Get a quotation from a workshop and check your policy terms before proceeding.
Car Insurance Claim vs Paying Out of Pocket: Which Is Better?
Factor
Claim through insurance
Pay out of pocket
Repair costs
The insurer pays the approved amount, subject to policy terms
You pay the full repair bill
Minor damage
May be less worthwhile if your NCD is affected
May be the more economical option
Major damage
Can reduce your financial burden
May require substantial savings
Effect on NCD
An at-fault own-damage claim generally affects your NCD
Usually no effect because you are not making a claim
Additional charges
An excess or other charges may apply under your policy
No insurance excess for the repair, but you pay all repair costs yourself
Important: The effect on your NCD depends on the type of claim. A standard at-fault own-damage claim can cause your NCD to reset to 0% at your next renewal. In contrast, an eligible Own Damage Knock-for-Knock (OD-KFK) claim when you are not at fault generally does not affect your NCD.
How Does NCD Affect Your Decision?
NCD is a discount that reduces the applicable base premium of your car insurance. For private cars in Malaysia, the discount can reach 55% after five consecutive years without claims that affect your NCD.
If you have a 55% NCD, losing that discount could increase your renewal cost. That is why it is worth comparing the repair bill against the potential cost of your next insurance premium before making a claim for minor damage.
Read BJAK’s guide on how NCD works in Malaysia to understand how claims can affect your discount. You can also check your current NCD before deciding.
Example: Should You Claim or Pay for Repairs Yourself?
Suppose your car has minor damage and the workshop quotes RM800 for repairs.
Item
Estimated amount
Repair quotation
RM800
Cost if you pay yourself
RM800
Approved repair amount if you claim
Depends on the assessment and policy
Effect on NCD
Depends on the type of claim
If you make a standard own-damage claim that affects your NCD, you should consider the potential increase in your insurance renewal cost.
On the other hand, if you pay the RM800 repair bill yourself, you avoid making an insurance claim for that damage, and your NCD would generally remain unchanged.
However, the best option depends on the actual circumstances, including possible hidden damage and whether another party is involved.
These figures are for illustration only. Check the actual repair quotation and discuss your options with your insurer before deciding.
What If the Accident Was Not Your Fault?
If another driver caused the accident, you may not need to pay for the repairs yourself or make a standard own-damage claim.
If you have comprehensive insurance and meet the eligibility requirements, ask your insurer about an Own Damage Knock-for-Knock (OD-KFK) claim. Under this arrangement, you claim through your own insurer, and your NCD generally remains unaffected if the claim qualifies.
If OD-KFK is unavailable, you may need to pursue a third-party claim against the at-fault driver’s insurer instead.
There is no single answer that works for every accident. For minor damage, paying for repairs yourself may be more cost-effective if the bill is low compared with the potential financial impact of a claim. For major damage, a valid insurance claim can help reduce your out-of-pocket expenses.
Before deciding, compare repair quotations, check your NCD and understand your policy terms. You can also use BJAK to compare car insurance options and find coverage that suits your needs.
Will making a car insurance claim cause me to lose my NCD?
Not necessarily. A standard own-damage claim that affects your NCD can cause your discount to reset to 0% at your next renewal. However, certain claims, such as eligible OD-KFK claims or windscreen claims under the appropriate add-on, generally do not affect your NCD.
If car repairs cost RM500, should I claim or pay myself?
For a RM500 repair bill, compare the cost of repairs with the potential impact on your NCD, any applicable excess and your future insurance costs. Paying yourself may be more economical, but consider the full circumstances before deciding.
Can I claim insurance if another driver hits my car?
Yes, you may be able to claim against the at-fault driver’s insurer. If you have comprehensive insurance and meet the relevant conditions, you can also ask about making an OD-KFK claim through your own insurer.
Does comprehensive car insurance cover all types of damage?
No. Coverage depends on your policy terms, the circumstances of the incident and any exclusions. For example, flood damage generally requires the relevant additional coverage, such as Special Perils cover.
Do I need to make a police report if the damage is minor?
If an accident involves property damage or injury, follow the applicable police-reporting requirements. In Malaysia, accidents covered by Section 52(2) of the Road Transport Act 1987 must be reported to the police within 24 hours. You should also notify your insurer within the period specified in your policy.
Nabil Farhan· · 5 min read
