It looks like someone stole the car, and the owner wonders how their insurance company will value it. There’s no need to worry; I’ve got you covered. Let’s start with some basics about Malaysian car insurance. In Malaysia, you will find that most car insurance policies have what is called a “market value” clause, which means that in the event of a total loss (such as a vehicle theft), the insurance company will only compensate you for the current market value of the vehicle at the moment the failure occurs.
How does the insurance company develop a figure for the market value of a stolen vehicle? The deal will usually be determined using a few different methods.
Factors Insurance Companies Consider To Come Up With a Value For a Stolen Car
They Will Check The Original Cost Of The Car
They’ll first look at the car’s original purchase price. It will provide a baseline value for them to work with. It’s important to remember that your car’s value isn’t determined solely by what you paid for it. Over time, cars depreciate, so that the insurance company will consider that.
They Will Check The Current Market Cost Of Similar Car
Their next step will be to analyze the market conditions for similar vehicles. Based on this information, they will determine the value of the stolen car by comparing it with other vehicles currently on the market.
The Vehicle’s Market Value At The Time Of Theft
It is important to remember that insurance companies generally only pay out the car’s market value when the theft occurs. It means that if your vehicle has some unique features or is a classic, they may not consider it. It’s essential to document any upgrades or special features you’ve made to your car and any certificates or appraisals. They will consider Outstanding Loans and Leases. Furthermore, insurance companies will also consider any outstanding loans or leases on the vehicle. As a result, your insurance company will likely deduct from your payout the amount you still owe on your car when it’s stolen.
Deductibles
Furthermore, some insurance policies in Malaysia will require you to pay a “deductible” to cover the remainder of the loss, so you should keep that in mind when purchasing your insurance policy. The deductible is the price you must pay out-of-pocket before your insurance company begins to spend the rest of your loss on your behalf. So, for example, if you have a car insurance policy with an RM500 deductible, and your stolen car is worth RM10,000, you will have to pay the first RM500 before the insurance company covers the remaining RM9,500 of the claim.
Consult Industry Guides
To determine the value of a stolen car, they may also consult industry guides, such as the Malaysia Automobile Association (MAA). In these guides, you will typically find information on the market values for various make and model car types. As far as the insurance company is concerned, they tend to pay less than the vehicle’s current market value. Even if you get less than expected, you’ll have some money for a new car.
Final Thought
In Malaysia, your insurer will determine the value of your stolen car based on the original purchase price, current market conditions for similar vehicles, and industry guides. However, you shouldn’t be surprised if it fails to meet your expectations. It is also vital to know the claim process. Whenever you make a claim, you should have all the necessary documents, such as the police report, proof of ownership, and insurance policy. Taking care of a claim can take several weeks or months and is time-consuming.
Make sure you choose the best policy based on your research and learn what is covered and what is not. Always remember that the best thing you can do is prevent damage from happening in the first place, so please Stay Safe!
