Is it time to acquire a new car insurance policy? If you consider the desired terms for the upcoming deal, you might have come across the term “liability car insurance.” Are you wondering what this means? If you feel confused about this, you’ve come to the right place. Here is everything you should know about the term and whether you need this type of insurance in Malaysia!
Liability Car Insurance
Let’s cover the basics first and start with the definition of liability car insurance. The odds are that you’ve heard about this expression under a different name. Liability car insurance is nothing else than a third-party cover. The quick explanation is that it covers any damage caused by your car to other parties. However, it won’t make up for damages to your vehicle or the people inside it.
Is Liability Car Insurance Mandatory In Malaysia?
Yes, liability car insurance is mandatory by law in Malaysia. It is the primary policy type that you can have in this country. While it is possible to add extras or take a comprehensive policy, every vehicle owner’s lowest insurance level should have this one.
What Does Liability Car Insurance Include?
Do you know why liability car insurance is called a third-party? That is because it refers to third parties related to the accident. As the policy owner, you are the first party, while the insurance company is the second party. Anyone else who participates in the incident is the third party. The third-party policy covers any damage to other people or another person’s property. That is a simple explanation, but let’s explain it with an example. Let’s say that you are driving around town, and you don’t see a car in front of you. You drive into it, causing significant damage to both vehicles. If this happens, the third-party insurance will cover any damage to the other car, but you will have to pay for those on your car. It is vital to note that liability vehicle insurance is also applicable to people in the other car and passengers who might have participated in the accident. That includes death and bodily injuries, which means your policy will cover any medical and other expenses.
What Doesn’t a Liability Car Insurance Include?
Here are the details of what a liability vehicle policy won’t cover:
- Any medical and other expenses for the injuries to the driver
- Damage caused to your vehicle.
- Damage caused to your windscreen by the wind or storm.
- Flood, fire, and damage caused by environmental factors
- Vehicle theft
It is important to note that you can choose a more detailed policy if you want a higher protection level. For example, there is an extra that protects your vehicle from theft and fire. That can play an important role if you live in neighborhoods with a high crime rate. Comprehensive car insurance is a smart move when you want to include first-party coverage in the policy.
When Can Liability Car Insurance Be a Smart Decision?
It is the basic policy you can get from providers in Malaysia. If your car is old, and the repairs are not that expensive, a third-party policy might be a wise move. You can also consider it if your car loan and financing agreements expired or plan to purchase a new vehicle in the next couple of years.