How to Choose Between Comprehensive & Third Party Plans

Third Party insurance is the most basic type of motor insurance, and it is mandatory in order to legally drive on public roads. It covers death and injuries to others, as well as damage to third party property, but it never covers repairs to your own vehicle. This type of insurance is needed for road tax renewal (e-LKM).

In summary: Third Party insurance is cheapest, but you will need to cover the cost of any damage to your own car if you're at fault or if your car is stolen or affected by flooding.

Comprehensive insurance protects you against a wide range of risk:
    • Damage to your own car from accidents, even if you are at faulty
    • Fire, explosion, theft
    • Damage to third party vehicles or property

Many insurers offer extra benefits with comprehensive plans—such as windscreen coverage, special perils (for floods and landslides), unlimited towing, all-driver coverage, and personal accident (Motor PA) protection. These add-ons can be selected based on your needs.

In summary: Comprehensive insurance costs more, but it provides complete protection for both your vehicle and third parties—making it the best choice for new cars, high-value cars, or anyone who depends on their car for daily transportation.

Choosing the right car insurance depends on several important factors. Here are some key points to consider:

•  Vehicle Age and Value:
  Newer or higher-value cars often benefit from comprehensive coverage.

• Car Usage:
  If you drive daily or use your car for work, a broader coverage may be advisable.

• Location & Environmental Risks:
  Areas prone to floods or theft may warrant additional protection, such as Special Perils or theft cover. Consider your parking location and exposure to environmental risks.

• Sum Insured:
  Ensure the sum insured reflects your car’s market value to avoid being underinsured or overinsured for coverage.

• Personal Preferences & Budget:
  Consider your need for extra protection (such as windscreen or personal accident add-ons), and your budget for annual premiums.

Before making a decision, compare available plans and benefits, and consult your insurer or agent if in doubt.

Q: Is car insurance mandatory in Malaysia?
A: Yes. By law, you must have at least Third Party insurance to renew your road tax.

Q: What is NCD (No-Claim Discount)?
A: It's a discount of up to 55% on your premium, given as a reward for not making any insurance claims over several years.

Q: What does Special Perils cover?
A: It provides protection against natural disasters such as floods, landslides, and storms. This coverage must be added as must be purchased together with basic Motor insurance cover.

Q: What's the difference between conventional and takaful car insurance?
A: Takaful is Shariah-compliant and follows Islamic principles, but it offers coverage similar to conventional insurance.

The benefit(s) payable under eligible policy is protected by PIDM up to limits. Please refer to PIDM’s TIPS Brochure or contact TMIM or PIDM (visit www.pidm.gov.my).