You have just bought your own set of wheels and can't wait to "get your motor running" on our spacious highways. Before you rev that engine up and hit the road, the law requires drivers of motor vehicles to buy motor insurance.

The latest motor accident statistics revealed that over 215,000 motor vehicles were involved in accidents in 1997, a 14 per cent increase from the previous year. Moreover, with more than one out of four Malaysians owning either a motorcycle or a motorcar it is no wonder that motor insurance is a mandatory requirement.

It is also for this reason many of us do not comprehend the role motor insurance plays in protecting us against a loss or accident which may result in serious damage to our motor vehicles or injury to another person. When we purchase a motor insurance, we are in fact protecting our investment, which, at today's prices, is probably the second most valuable asset after our home.

How do we receive protection from our motor insurance?

To receive this protection, we, as policy holders, pay a premium to our appointed insurer. The insurer will then accumulate all premiums collected into a fund which is then used to compensate any policyholder who is unfortunate enough to suffer a loss from a motor accident. Thus, a loss is paid from the premiums made by the unfortunate policyholders and by all the other policyholders who have not met with an accident.

What are the types of motor insurance covers available?

Choosing the right insurance policy is much like choosing the right motor vehicle. It is required to fit our individual needs and lifestyle but at the same time be within our budget. Although, the Road Transport Act 1987 requires us to have a minimum third party liability coverage, other types of coverage are usually optional.

The key to finding which coverage is best for you involves learning about the three types of motor insurance covers in Malaysia. They are the 'Act Only', 'Third Party' and 'Comprehensive'.

The Act Only motor insurance policy provides the minimum cover required by the law, thus giving rise to the name. Under this Act, drivers of motor vehicles have to buy motor insurance to ensure that drivers can meet their liabilities if they injure or cause the death of other people in an accident. Act Only policies are rarely purchased as the insurance protection is quite limited.

Third Party motor insurance is wider than 'Act Only' insurance. Besides giving cover against death and injury to third parties, it provides protection against other legal liabilities such as damage to the property of a third party (usually somebody else's car or motorcycle or a neighbour's gate) and certain specified legal costs.

Under the Third Party cover, a policyholder may opt to include protection for loss or damage to own vehicle due to fire or theft only. However, most policyholders have found it is more cost effective and worthwhile to pay a little bit more and be protected under the Comprehensive motor insurance policy instead.

While Comprehensive motor insurance policy is the widest form of cover available, it does not provide cover for every conceivable type of risk. In addition to that covered in Act Only and Third Party motor insurance, the Comprehensive insurance policy also gives a number of other types of protection including loss or damage to the motor vehicle as a result of fire or theft. More importantly, this policy covers accidental damages to the insured's own vehicle. This additional cover enables the vehicle owner to have his vehicle repaired, reinstated or replaced in case of accidental damage or loss.

On top of these 3 main categories of motor insurance policies, other additional coverage are available for:

• Breakage of glass in windscreens or windows
• Floods, landslide, landslip or other convulsion of nature
• Legal liability of passengers for acts of negligence (such as the passenger opening his car door and causing an accident with an moving vehicle)
• Use of private cars for tuition purposes (such as teaching a novice driver how to drive using one's private car)

Car owners are advised to enquire with their agents or insurers on these additional coverage and others as these usually involve additional premiums.

What are the steps to take when making an accident claim?

If an accident occurs, you must follow certain procedures to protect yourself.

Firstly, you must stop your vehicle and exchange particulars with all the other people involved in the accident. In particular, you should:

• Obtain name (s) and address(es) of other driver(s) involved.
• Note their vehicle registration number(s) and make of vehicle.
• Ask for the name of their insurers and their policy or certificate number.
• Note names and address of independent witnesses and make a rough diagram of the accident
• It is your duty to produce your Certificate of Insurance when required to do so by the police. If this information is not available at the scene of the accident, you will be required to produce it to the police within five days.
• If there is injury to any person or damage to another vehicle, or other property, give your name and address of the owner of the vehicle you are driving and its registration number to anyone who has reasonable grounds of wanting them.
• Do not discuss whose fault it was as this may create difficulties for your insurers in their handling of your claim.
• Inform your insurers as soon as possible even if you do not intend to make a claim. This is a condition of your policy.
• Fill in the insurer's accident report form completely and include any additional relevant information not given in answer to direct questions.

Once you have reported an accident and your car has been towed to the nearest police station or workshop, your insurer will send a loss adjuster to assess the damage to your car and identify the circumstances of the accident.

A loss adjuster is a specialist whose job is to find out what really happened and how it happened. He will recommend to the insurer how much to settle a claim for in each particular case.

Please send your questions on general insurance to:
Persatuan Insuran Am Malaysia,
3rd Floor, Wisma PIAM, 150, Jalan Tun Sambanthan,
50470 Kuala Lumpur.
Tel : 03 - 2274 7395/9
Fax : 03 - 2274 5910

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