Insurance: Leaky roof

TMM,Monday, 29 November 2010 

Importance of ‘water-proof’ protection before risks happen 

It is common practice for motor firms to list the basic insurance premium in car prices. If the vehicles are to be financed through hire-purchase, they must be insured at market value. 

However, some motorists have later found that compensation is not paid by the insurance company for damage caused by floods or riots. 

Unfortunately, a vehicle submerged in a flooded road or basement is as good as a total loss. 

With rainy days ahead, it would be wise for motorists, especially in high-risk areas, to insure their vehicles for 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 parked by the roadside 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 always exercise caution before letting others, such as friends or car jockeys drive away their vehicles as they may go missing after that. 

The insurance company may not entertain claims for such losses as the vehicles were voluntarily handed over and not exactly stolen. 

Anyone leaving the car’s engine running to dash into a convenience 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 if their passengers sometimes include business associates. 

The premium for such cover is at 25 per cent of the third party premium, which is only RM22.50 per annum for a two-litre car. 

Passengers too, can be sued for negligence such as a motorcyclist crashing into a just opened car door. The premium for “legal liability of passengers’ is just RM7.50 per annum. 

Therefore, vehicle owners and drivers must be aware their existing motor insurance policy does not cover for all eventualities. 

Even when additional cover is taken, they still have to exercise personal responsibility. To do otherwise can lead to financial ruin. 

Apart from owners losing their vehicles, drivers are personally liable when sued for millions of ringgit for causing injuries or death. 

YS Chan 

Kuala Lumpur