3 Ways Your Private Car Insurance Will Burn A Hole in Your Pocket

3 Ways  Your Private Car Insurance  Will Burn A Hole in Your Pocket

In  Malaysia buying a car serves as a mark of independence and adulthood in most of our lives.  However, do you know  what is the extent of coverage that your standard private car insurance policy provides and what it does not cover?

Versi Bahasa Malaysia”


Sports Car
Sports Car

What your  Standard Private Car Insurance Policy WILL NOT Cover.

1     There are many instances that the insurance company will deny liability, and some of them  are  called  “Special Perils”, which includes flood, typhoon, hurricane, storm, tempest, volcanic eruption, earthquake, landslide, landslip, subsidence, or other convulsion of nature.


2     Furthermore, the generic Policy does not cover loss or damage caused by riot, strike,  civil commotion,  and also Legal Liability to Passengers.

2.1 For better understanding of the calculations herein, we  shall use the example of  a  motor car insurance for a Toyota Avanza, a 7-seater car with an  engine capacity  1,496 cc, and insured at a sum of RM70,000.

Flood, Storm, and Tempest

3     Going through the list of special perils as stated above, one cannot

Flood submerging an entire village
Flood submerging an entire village

help but wonder “Would I be covered if my car is stuck in a flood?”   The answer to that is No.

4     Your common Policy does not cover for the payment of any

mechanical breakdowns, engine failure  or other damages that are caused by flood water entering the interiors of your car.

4.1  One of our clients had to replace the engine of his C Class, after his car was hit by flash flood in the City,  the replacement cost for the engine  was a whopping USD20,000 (RM80,000).

Endorsement for Flood

Car submerged in a flood
Car submerged in a flood

5     You  have the option to supplement your policy by the payment of an additional premium  with a flood, storm, hurricane, and tempest Endorsement.



5.1     An endorsement is basically an additional coverage that you may  subscribe together with the original Policy with a fee.

5.2     For the Endorsement for Special Perils, the additional  premium  required  is 0.5% of the value of the car.
5.2.1     For example, the calculation for a car with a sum insured of RM70,000 is as follows:
0.5% x RM 70,0000.00 = RM 350.00

Riot, Strike, and Civil Commotion (RSCC)

6      In view of the current events, riots and other public disturbances are    becoming  a common issue worldwide.

6.1     The generic Policy does not cover for damages inflicted upon your car  consequence to a violent act, or any disturbance of the public peace.

Endorsement for RSCC

7     To avoid being devastated by such events,  subscribing to the endorsement providing protection against riots, strikes, and civil commotions  will be beneficial  as it specifically covers the following:

7.1     The act of any person taking part in any disturbance of the public peace or the acts of a lawful authority done in suppressing or minimizing the said disturbance;  and
7.2     The wilful act of any striker or worker done in demonstration of a strike or resistance to any lockout from the working premises, or the acts of any lawful authority done to suppress or minimize the consequences of the worker’s acts.

7.3     To obtain the  Endorsement for RSCC, one has to pay a premium of  0.3% of the sum assured.
7.3.1     For example, the calculation for the additional  premium for  a Toyota Avanza with a sum insured   at  RM 70,000.00 is as follows:
0.3% x RM 70,000.00 = RM 210.00

Legal Liabilities  to  Passengers

8     The  generic Policy    has a clause on the Exclusion of Legal Liabilities to  Passengers (“LLP”).    The insurer   will not cover you   for any  injury sustained by the  passengers.

Endorsement for LLP

A lady injured in an accident
A lady injured in an accident

9     You  can  choose to extend the cover by removing the existing LLP clause (Endorsement  100)  for a fee, then,  the Insurers will  cover you with some exceptions  as stated herein.

9.1     The premium for LLP endorsement is 25% of the Third Party Premium whereby RM 10.00 is added for every seat that is in excess of five seats.
9.2     For example, for a Toyota Avanza, with a sum insured at RM70,000  the Third Party Premium is estimated to be RM 168.75. Therefore, the calculation for the LLP Endorsement is as follows:
25% x RM 168.75 =RM 42.19
RM42.19+ RM20.00 (for the additional two seats) = RM 62.19


10     The  Insurers  WILL NOT pay for any bodily injury or death of a passenger who is:
10.1     paying for the ride;  or
10.2     your employee;  or
10.3     your family member, transported in the course of a  leisurely travel .

11     In the case Union Insurance Co. v Chan You Young [1995] 4 CLJ 92, decided by the Court of Appeal of Malaysia,  the wife of the Insured  was  able  to claim from Union Insurance Co.    as at the time of accident, she was being driven because she was heading to work instead of being on   leisurely travel.

Vehicles Entering Singapore
12      Another  point to note is that,  if  you are planning to drive to Singapore with your vehicle, you are required to have the  Endorsement for LLP as it is compulsory  in Singapore.


13     This  article is a part of Alex Chang & Co’s Corporate Social Responsibility   effort to share our thoughts  on some  legal matters.  Please  consult your legal advisors and/or your insurance brokers  on your specific needs.

13.1     The Copyright of this article is reserved, however, feel free to share  the link to this article.

Annexure, Example of Calculation

Iman Izzati Azhari

Iman Izzati Azhari Alex Chang
Iman Izzati Azhari


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One Thought on 3 Ways Your Private Car Insurance Will Burn A Hole in Your Pocket
    6 Mar 2018

    Nice Article…Great stuff, Thanks for sharing such a great article

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