While vehicle insurance is compulsory in Malaysia, there are many incidents where it is found the other driver/car is uninsured in the event of an accident. So, the question is asked, what happens next?
We spoke to our friends in both the police Traffic Investigation and Enforcement Department (JSPT) and our buddy in the general insurance industry specialising in vehicle insurance. Most of what they told us is not new, but both forwarded different viewpoints and opinions on such an event.
“Abang, it’s like this, if you don’t have insurance, you are breaking the law, simple as that. There is no excuse. Same goes with not having a licence or road tax, which makes your insurance invalid immediately,” said our JSPT contact. “For police, it is clear, terus saman (straight summons),” he said.
“As to whose fault it is in the accident, after JSPT completes the investigation, the report is issued to all parties concerned,” he added.” “After that it is up to the insurance companies to process the claims according to the facts in the report, or the courts if the accident involves injury or death,” he said in a matter of fact tone.
On the other side of the issue, from the insurance perspective, our insurance industry buddy, with over 20 years in the vehicle insurance segment, said much the same thing. “Yeah, if you get hit by someone without insurance, you have little recourse for compensation,” he explained.
“Aside from the police saman, which really costs nothing in the grand scheme of things, there is nothing else you can do,” he said, “except file a civil suit.” “The problem with many Malaysian drivers is this preoccupation with the NCD (No Claims Discount),” he adds.
The NCD is given as a “bonus” by the insurance company to the insurer for not making a claim during the period of insurance cover. “Forget about the NCD, you have first party insurance cover to take care of any damage to your car, no matter who causes it, yourself, the other driver, some random stray dog crossing the street,” he said.
Explaining further, our buddy says, “no need to cry if an accident happens. As long as no one is hurt, just do an own damage (OD) claim.” Elaborating on the damage to one’s vehicle caused by an uninsured driver, our insurance buddy says, “tough luck, it is what it is, the problem is one of enforcement but that is outside my (insurance company’s) control. I cannot force anyone to buy insurance but you as the vehicle owner is required to do so by law.”
“This Malaysian fixation on the NCD makes no sense. You have an accident, just claim. It’s just a car,” he adds. “If this were my vehicle, I would let the law deal with the other driver, and I would let my insurance deal with the repair and betterment of my vehicle, if any,” he elaborated.
“If you lose your NCD after five years of driving, but the accident requires your car get a repaint, say your total NCD lost is RM2,000… tell me, what kind of paint job are you going to get for RM2,000? On the other hand, you file an accident or OD claim, the vehicle gets sent to an accredited manufacturer 4S centre, you get the factory spec paint, all original parts, where are you going to get that for that price? Have you checked the price for a headlight or tail light lately?”
As for the Malaysian preoccupation with resale value, he says, “yes, the resale value of the car is affected if there is an accident which is why I always tell my clients to go to either the manufacturer’s 4S centre, or a reputable shop.” He adds, “at the end of the day, it’s just a car.”
“Of course no one wants to have an accident, insured driver or not,” he says, “but sometimes it’s unavoidable and as responsible road users, we should have adequate insurance coverage.” Noting the case of third party insurance, he says if you only have third party insurance which covers claims brought by another but does not cover your own vehicle, and the other driver has no insurance, then that’s a bad turn of events.
“Then you’re out of luck. If the other guy has no insurance and is at fault, and you only have third party insurance, then you’re on your own,” he says. That is why comprehensive insurance should be purchased whenever and wherever possible, excluding the case of classic and vintage vehicles he said.
“The other case is OD knock-for-knock (KFK) claims,” he says. This is where both parties will claim against their respective policy regardless of who is at fault, and it is left to the insurance companies to file a claim against each other for reimbursement where applicable.
“Either way, as the consumer, let the insurance company deal with it, that is what your policy is for. You don’t need more stress in what can be an already stressful situation,” says our insurance industry contact.
As for filing a civil claim, our insurance friend says that is always an option, except it costs time and money, plus finding a competent lawyer to take on the case. “If you have the time and the money to spend, great,” says our buddy, “if not, just claim against your policy and be done with it.”
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