For first-time vehicle owners, this might also be your first time renewing your motor insurance. Since motor insurance is compulsory by law in Malaysia under the Road Transport Act 1987, motor insurance renewal is something that you’d have to do every year, as motor insurance in Malaysia has a standard coverage that lasts for one year.
Motor insurance renewal is no longer a hassle now, as you can compare and renew motor insurance instantly and conveniently. Instead of visiting a few insurers to compare the plans one by one and going to JPJ to renew your road tax, everything can be done online now, including on our platform.
Have your personal and vehicle information ready before your motor insurance renewal
Before you start looking for the best motor insurance plans and renewing your motor insurance, some information will be required, specifically your personal and vehicle information. So make sure all of the information required is ready. Similar to when you were buying motor insurance for the first time, some of the info needed may include:
- Your full name
- IC number
- Contact number
- Vehicle number
- Vehicle model
High-performance engines: Higher premium rates
Keep in mind that you may get a higher premium rate if you own a sports car or a vehicle with an intermediate to high-performing rear engine model, compared to average cars. However, this doesn’t mean you can’t lower your premium rate.
For example, if your driving record is good and only selects the coverage and benefits that you truly need (minus the unnecessary add-ons), you could get a lower premium rate.
Understanding motor insurance detariffication
First, as a newbie, you must understand the Malaysian detariffication of motor insurance (or the removal of tariff). Before 2017, Bank Negara Malaysia was the one that controls the calculation method for motor insurance premium.
Once the tariff was removed, insurance companies can now implement their ways for premium calculation. Risk-based pricing is often the method used to determine your premium rate.
Risk-based pricing: The new method of premium calculation
This means that aside from relying solely on your vehicle information such as engine capacity and market value for premium calculation, your risk factors will also be considered, such as your driving record, gender, and age.
This detariffication isn’t necessarily a bad thing, as you can expect better premium rates, various product selections, and improved customer service, as insurance companies are now competing with one another to provide the best plans for consumers.
How you can take advantage of the risk-based pricing method
Your premium rate will be higher the more risk you carry based on this method, and vice versa. You can try to lower your premium rate by knowing what insurers consider as risk factors, like:
How you use your car
- If you’re commuting to work daily, chances are your premium rate will be higher, especially the further your office is located and where you drive (like the highway), compared to a housewife who only uses her car to run errands.
Type of your car
- As mentioned previously, you may get a higher premium rate if you own a sports car or a vehicle with an intermediate to high-performing rear engine model, compared to average cars.
Your claims history
- Claims made previously indicate that you’re a high-risk driver. Therefore your premium rate will be higher.
Your level of education or occupation
- As unfair and discriminatory as it is, the better your level of education or occupation, the lower the risk you carry, as perceived by insurers.
- If you are female, you may be in luck as your premium rate could be lower than most male drivers because female drivers are safer and drive more carefully.
- According to The Global Status Report on Road Safety published by the World Health Organisation (WHO) and the World Bank in December 2018, Malaysia had 7,152 deaths in 2016; 87% were males and 13% females.
- Young and less experienced drivers are perceived as high-risk drivers, so the premium rate will be higher.
- City-dwellers will often get a higher premium rate compared to those living in rural areas because most cities have a higher rate of vandalism, theft, and road accidents.
Now that you know what risk factors are taken into consideration by insurance companies when calculating premium rates, it’ll be easier for you to figure out a way to get a cheaper premium rate.
There are at least two things that you can do to lower the premium rate, for example:
Highlight your good driving record and zero claims history
- Both will be in your favour.
Increase the security of your car
- Ensure the auto-locks and alarms are working all the time. Install a few things if you can afford it, like a dash-cam. Reduce the risk of vehicle theft or damage by parking at a safe or well-guarded location.
Avoid unnecessary add-ons
- The more add-ons you opt-in to your plan, the more expensive your premium will be. Agents may try to sweet-talk you into add-ons that you might not even need. So think carefully about what you need as a driver.
Once you fully understand how motor insurance detariffication plays a role in determining your premium rate and how to lower it, you can start setting up your profile on our platform for motor insurance renewal. Receive quotes, compare, and make add-ons instantly from the comfort of your home!