TS,Wednesday November 24, 2010
It is the norm for motor firms to list the basic insurance premium in car prices. However, some motorists later discover that compensation is not paid for damage caused by floods or riots.
A vehicle submerged in a flooded road is as good as a total loss. It would be wise for motorists in high-risk areas to buy flood cover. This additional premium is pegged at half a percent of the insured value or RM500 for RM100,000 cover.
Vandals may damage vehicles during the year-end merry making. To cover for such riot and civil commotion would require an additional RM300 premium for RM100,000 cover.
Owners should exercise caution before letting friends or car jockeys drive away their vehicles as they may go missing. The insurer may not entertain claims for such losses as the vehicles were voluntarily handed over.
Anyone leaving the car’s engine running to dash into a store only to find someone had driven it away will have a problem claiming for the loss as such negligence are not covered. Likewise, there is no insurance cover when the driver is driving under the influence of drugs or alcohol.
Injured passengers may sue drivers involved in accidents because of their negligence. As such, it is prudent for businesspersons and companies to insure their cars for ‘Legal liability to Passengers’. The premium for such cover is at 25% of the third party premium, which is only RM22.50 a year for a two litre car.
Passengers too can be sued for negligence such as a motorcyclist crashing into a open car door. The premium for “Legal liability of passengers’ is RM7.50 a year.
Vehicle owners and drivers must be aware that their existing motor insurance does not cover all eventualities. Even when additional covers are taken, they still have to exercise personal responsibility. Apart from owners losing their vehicles, drivers are personally liable when sued for causing injuries or death.
YS Chan
Kuala Lumpur
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