Sum Insured is the insured value of your car.
- It is not your roadtax.
- It is not your service fee.
- It is not always your car's selling price.
It is the value used by your insurer to calculate your premium and assess claim payout.
What does Sum Insured mean?
Sum Insured is the amount your car is covered for under your motor insurance policy.
It matters most when your car is stolen, declared total loss, or damaged beyond economical repair.
The right Sum Insured helps you avoid paying too little and getting a lower claim payout, or paying too much premium for extra value you may not use.
Why Sum Insured matters
It affects your premium
A higher Sum Insured usually means a higher premium. A lower Sum Insured may reduce your premium, but it can also reduce your claim payout.
It affects your claim payout
If your car is stolen or declared total loss, your insurer will review your policy terms, Sum Insured, and car value before deciding the payout.
Market Value vs Agreed Value
What is Market Value?
Market value means your car is insured based on its value at the time of loss.
What is Agreed Value?
Agreed value means you and the insurer agree on the insured value when the policy starts.
| Type | Meaning | Best for |
|---|---|---|
| Market Value | Based on your car's value at the time of loss | Standard renewal |
| Agreed Value | Based on the amount agreed when the policy starts | More payout certainty |
How is Sum Insured calculated?
Your Sum Insured is usually based on:
- Car make
- Car model
- Car year
- Variant
- Market value
- Insurer valuation
- Policy type
You can usually choose within a recommended range. The safest option is to choose an amount close to your car's current market value or the agreed value offered by the insurer.
What affects your Sum Insured
Car age
Older cars usually have lower market value.
Car model and variant
Higher-spec variants may have higher insured value.
Car condition and mileage
Condition and mileage can affect valuation during claim assessment.
Market demand
Some cars hold value better than others.
Policy type
Market value and agreed value work differently during claims.
Under-insured vs Over-insured
Under-insured
Your car is under-insured when your Sum Insured is lower than your car's actual value. This may reduce your claim payout.
Car value: RM50,000
Sum Insured: RM30,000
Result: You may not receive enough to cover the full loss.
Over-insured
Your car is over-insured when your Sum Insured is higher than your car's actual value. This may increase your premium without giving you extra claim benefit.
Car value: RM50,000
Sum Insured: RM70,000
Result: You may pay more premium than needed.
Example: Sum Insured and claim payout
| Scenario | Sum Insured | Car Value | What it means |
|---|---|---|---|
| Right amount | RM50,000 | RM50,000 | Properly insured |
| Under-insured | RM30,000 | RM50,000 | Claim payout may be reduced |
| Over-insured | RM70,000 | RM50,000 | Premium may be higher than needed |
How to choose the right Sum Insured
Choose an amount close to your car's current value.
- Is the amount close to your car's market value?
- Is the policy based on market value or agreed value?
- Is the premium difference worth it?
- Are you comfortable with the claim payout risk?
- Is your car still under loan or hire purchase?