To claim or not to claim, that is the question that plagues car owners every time they get involved in an accident. Car insurance is compulsory for all car owners in Malaysia, so it makes sense to claim in the event of accidents, right? Well, not really. Here are some things you should consider before claiming:
Your NCD is Lost
The No-Claim Discount is a (potentially) sizeable discount that keeps your car insurance at a much more affordable rate. It increases with every claim-free year you go through, maximizing at 55% discount off your car insurance next year. That’s literally less than half the price! However, the moment you claim from your car insurance, the bar gets set back to zero, which means you’re back to paying 100% of your car insurance value. Moral of the story: claim only when it’s worth it.
That said, there are instances when you can claim from your car insurance without losing your precious NCD. To do this, you must be innocent of fault during the accident that caused damage to your car. (Unfortunately, damage from natural disasters don’t count.) This means that the other private vehicle driver must be proven to be guilty of causing the accident, they must have insured their vehicle, and there are no death or personal injury claims. So whenever possible, collect proof of your innocence without tampering with evidence, and submit it together with your claim. It might just save your NCB!
Value of Damage
This moral bears repeating: claim only when it’s worth it. If you’re not familiar with damage cost estimation, simply pop into several car repair shops to obtain quotations. Multiple quotations will provide you with a better idea of what the repair will actually cost. If it’s just a minor fender bender that won’t dent your budget – and more importantly, won’t exceed the value of your NCD discount – then consider paying for it out of pocket. For example, let’s say your car insurance is worth RM800 after NCD of 55%, for ease of calculation. The full value of your car insurance is around RM1700 without NCD. Therefore, any repairs that cost less than RM900 should be paid out of your own pocket whenever possible, because it means that you can continue saving RM900 on your car insurance next year.
Defect or Recklessness?
We’re all guilty of the minor offence of using our mobile phones, eating, or drinking while driving, all things that take our eyes off the road for even a split second. Your fault is pretty much indisputable in such cases, so claiming would be a waste of time. However, what if the accident which you thought was caused by accidental acceleration was actually caused by an inherent defect in your vehicle, as was the case with some Toyota and Lexus models way back in 2009 till 2011? The situation is a little murky, but basically, your insurer may but is not obliged to subrogate against the manufacturer, or you can sue, which is a costly and lengthy process that isn’t recommended unless in the most dire of circumstances. If your insurer successfully subrogates your claim, then you will not be at fault and your NCD will remain intact.