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Special Perils Add-on In Auto Insurance

Special Perils Add-on In Auto Insurance blog

You’ll usually find three basic car insurance options in Malaysia. The third-party cover insurance is the basic policy, and you can expand it with fire and theft coverage. Finally, the comprehensive cover offers the most protection as it includes third and first-party damages. Apart from these important deals, auto insurance policies also include various add-ons. These are extra coverages protecting you in certain situations that your standard policies don’t cover. You’ll find a wide range of add-ons available, and one of them is extra coverage for special perils. Let’s check out what this add-on means.

What Is Special Perils Add-On?

According to auto insurance companies, special perils are unforeseen natural disasters. Unfortunately, these happen throughout Malaysia. A natural disaster could be an earthquake, which occurs suddenly and catches us all off guard. The earthquake might cause a tree or another object to fall on your car. That could damage the vehicle or destroy it completely. Another example of a natural disaster is soil sinking. This could happen as a result of heavy rains, but also earthquakes. Apart from the soil sinking, a landslide could damage your vehicle. Storms and flash floods are another potential disaster that rarely occurs but can destroy your car. The term “special perils” was chosen for a reason. It’s because these events occur rarely. That’s why you’ll find the premium for this add-on low. The small difference in the total insurance cost is why many vehicle owners choose to be on the safe side and apply for this extra coverage.

What Are The Benefits Of The Special Perils Extra Coverage?

The compensation you are entitled to will depend on the deal you signed. However, we’ll give you a couple of examples. For starters, you might choose a full special perils coverage or only partial. This table will explain the details:

Full Coverage

Partial Coverage

Car value





Up to 50%, depending on your choice

Sum insured


25,000 (example)

Premium (% of the sum insured)



Premium amount



Repair cost for damages



Maximum potential payout



How much policyholder pays?



The policy details might vary depending on the insurance you choose, so please use the table above as an example. Now, as you can see, the partial coverage has a cheaper premium. However, the rate is higher in most insurance agencies. In our example, it’s 0.4% of the sum insured for the partial coverage, while you only pay 0.25% for full coverage. Another thing to note is that it’s worth having full coverage in case of natural disasters. That’s because special perils happen often, but they usually cause major damage. If you pick full coverage, you’ll receive 100% of the repair cost up to the sum insured. That gives you peace of mind, and the difference in total premium price isn’t that significant.

Do You Have To Apply For This Add-On In Your Insurance Company?

The answer is yes, and this applies to all extra coverages. You’ll need to apply for any add-on with the same agency that you signed the initial insurance deal with. The special perils add-on should be applicable as long as your policy lasts. If your vehicle suffers damage from unforeseen disasters, make sure to reach and file a claim as soon as possible.

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