2017 Buying Guide for Motor Insurance/Takaful and Road Tax in Malaysia

To many Malaysians, renewing their motor insurance every year is as easy as “ABC”. Thanks to the competitive market, customers these days do not even need to pick up the phone to inform their agent to make the renewal for them. Instead, these very efficient agents will contact the customers to remind them of the coming expiry date and offer their service to renew road tax and insurance. How convenient.

The NEW ways of buying Motor Insurance in Malaysia

Today, consumers are give more ways to buy motor insurance. Companies and technologies are offering new ways like the internet to buy motor insurance. Each way or better known as “channel” offer its own unique advantages and disadvantages to you. There is no one right way to buy motor insurance. When you decide how you would like to purchase your motor insurance, you might choose convenience and speed over price, while someone else might chose to have better support during claims. In this guide, we take a closer look at all the possible ways of buying insurance in Malaysia and the advantages and disadvantages for each of them.

Remember, no matter which way you choose to buy your motor insurance, the insurance cover is still the same. The difference is more in the Price, SPEED & CONVENIENCE, SALES ADVICE and the CLAIMS SUPPORT offered.

PRICE

Looks at how good the price will be on average when you buy the insurance. An example of GOOD is when you can get your insurance at the best price.

SPEED & CONVENIENCE

Looks at how easy and fast you can get your insurance and road tax. An example of GOOD is when you can get your insurance and road tax on the same day without leaving your house.

SALES ADVICE

Looks at how much assistance you get when buying your insurance. An example of GOOD is when you have someone explaining to you the different insurance terms and helps you make the right choices.

CLAIMS SUPPORT

Looks at how much assistance you get when you have an accident. An example of GOOD is when someone is available to guide you on the steps to take, assists you when making a police report and helps with claims against the insurance company.

Buying from MyEG online

PRICE: NEUTRAL

When you buy your insurance from MyEG, you do not get a 10% discount. MyEG acts as an agent, so you are not buying directly from the insurance companies. MyEG currently (June 2017) offers insurance from the following insurance companies: AIG, Zurich Takaful, Etiqa Takaful, RHB Insurance, Berjaya Sompo Insurance and Takaful Malaysia.

SPEED & CONVENIENCE: GOOD

MyEG is very convenient because besides buying motor insurance, you can benefit from other useful services like check your summons and purchase your road tax. This saves you a lot of time and trouble, especially since you can have both the insurance and road tax delivered to your doorstep.

SALES ADVICE: BAD

The disadvantage of buying direct is that you need to have some background knowledge on insurance to select the right insurance company and policy. With MyEG you can choose from different insurance companies, but you will not know what the differences are. With the start of the Motor Detariffication this July, you will want to compare prices among the various insurance companies to find the cheapest insurance. You will need to do that on your own for each of the companies.

CLAIMS SUPPORT: BAD

When you have a claim, MyEG offers a hotline that you can call. But when you call the line, MyEG will refer you to the insurance company hotline or website. There is no support in filling out the insurance claims form. Without knowledge and experience, you may find it difficult to go about the claim process on your own.

Buying from Pos Malaysia

PRICE: BAD

Pos Malaysia does not offer the 10% direct discount because you are not buying the insurance directly. If there is an insurance branch near you, it is better for you to buy your insurance directly from the branch office, because you will receive a 10% discount. At Pos Malaysia, you get the same service  as offered by the branch office, but without any discount.

SPEED & CONVENIENCE: GOOD

The biggest advantage of Pos Malaysia is that they can be found almost anywhere. Pos Malaysia has over 700 locations nationwide where you can buy your motor insurance. A big plus is that when you buy insurance you can also purchase the road tax simultaneously. Also, Pos Malaysia offers insurance from many different insurance companies.

SALES ADVICE: NEUTRAL

When you buy insurance from the Pos Malaysia counter, your buying experience will depend on the clerk behind the window. If the clerk is experienced and knowledgable, he/she will be able to guide you to an insurance company and product that is best for you. If you are unlucky, you will get a clerk that will try to sell you an insurance that is best for Pos Malaysia, because they get better incentives from the insurance companies.

CLAIMS SUPPORT: BAD

Pos Malaysia does not have a claims department. When you need to file a claim, you will have to find out from your documents from which insurance company you bought the policy from. Then you need to contact the insurance company to inform you what forms you need to fill out. There is no support in filling out the claims form. Without knowledge and experience, you may find it difficult to go about the claim process on your own.

Buying insurance DIRECT from the insurance or Takaful branch

PRICE: GOOD

If you buy your insurance directly from the insurance company, you get 10% discount on your premium. This is great because it offers the lowest possible price for you from that particular insurance company.  If you buy the insurance from a Takaful company, you might even be entitled to a 15% rebate when you renew your motor insurance. This means next year, you can save up to 25% on your motor insurance.

SPEED & CONVENIENCE: BAD

To buy insurance from the insurance company directly, you need to find out where the nearest insurance branch is. This is less convenient than buying from Pos Malaysia, because Pos Malaysia has more than 700 locations. Allianz Malaysia, one of the largest motor insurer has only 35 branches. You need to be careful, when choosing a branch, because some branches only sell Life insurance and not Motor Insurance. Also, you have to go out and buy yourself the insurance from the counter to get the 10% discount, because you need to show your IC. If you want to buy the road tax at the same time, you will also need to check fi the branch offers road tax renewal on the spot. Only a few branches have the machine to print out the road tax. We categorized the SPEED & CONVENIENCE BAD, because of those inconveniences.

SALES ADVICE: BAD

The disadvantage of buying from the insurance branch is that you need to have some knowledge on insurance to know which insurance company you want to buy from. So in advance you need to know how good the insurance company is. Also you need to know if the insurance company that you want to go, offers the right price for you. If you want to compare the insurance from different companies, you will need to go to each one of them to find out the price. With MyEG and Pos Malaysia you can choose from different insurance companies at one location. When you go to the insurance branch, you can only choose from that insurance company.

If you want to research about the quality of the insurance company, you can read our article 2016 Malaysia Motor Insurance Award to find our ranking.

If you buy insurance at the insurance branch, you also need to check beforehand if they offer road tax renewal on the spot, as not all branches have the capability to issue road tax immediately.

CLAIMS SUPPORT: NEUTRAL

When you are involved in an accident, you can walk into the same insurance branch you purchased your insurance from to file a claim. You can speak with the person in charge face-to-face, so you can get help in making the claim. This is much better than having to wait on the line with the call center or waiting for an email response. Here you can just walk into the branch and find a person responsible for claims.

Buying insurance ONLINE DIRECT from the insurance/takaful branch

PRICE: GOOD

If you buy your insurance online direct from the insurance company, you get 10% discount on your premium. This is great because it offers the lowest possible price for you from that particular insurance company.  If you buy the insurance from a Takaful company, then you might even be entitled to 15% rebate, when you renew your motor insurance. This means next year, you can save up to 25% on your motor insurance.

You can find a list of insurance companies that offer insurance online in our article Advantages and Disadvantages of Buying Motor Insurance Online in Malaysia.

SPEED & CONVENIENCE: BAD

Similar to buying directly from the branch, the disadvantage of buying online direct is that you need to have some knowledge on insurance. You need to know which insurance company is the best for you and what insurance product to select.

If you buy insurance online, you will need to buy the road tax separately on your own. Most insurance companies do not combine the purchase of insurance with road tax like MyEG does.

SALES ADVICE: BAD

The quality of sales advice you get is similar to buying insurance from MyEG. You need to have some knowledge of insurance and know from which company you want to buy online from. Compared to insurance branches buying online is good and bad at the same time. It is good, because if you want to compare prices among companies, you do not need to go to each one of them physically instead you can do so online. It is bad however because you do not have a person that you can ask questions. You need to find the information on your own on the internet.

CLAIMS SUPPORT: NEUTRAL

Unlike buying your motor insurance online through MyEG, you still have insurance branches that you can go to. You can then speak to someone in person to get help with your insurance claim. We ranked it as NEUTRAL because in case the insurance company denies you the claim, you are on your own to figure things out. Insurance staff make mistakes, so you want to have someone you can consult with.

Buying from full-time insurance/takaful agents

In our yearly survey to find the best motor insurance company in Malaysia, we found that Malaysians largely buy their insurance from an agent. In 2016, 34% of our survey respondents bought through an agent. You can read more about the award here. So we are curious to see how good the insurance agents are compared to the other channels.

PRICE: NEUTRAL

We have ranked buying from an insurance agent as neutral, because it really depends on how efficient your insurance agent is and how well you know him. If your insurance agent is a family member, then there might even be a chance that you will receive part of the commission back. On the other hand, it is not BAD like Pos Malaysia, because you pay for the extra service that a good agent is providing you.

SPEED & CONVENIENCE: GOOD

Buying from an insurance agent offers the best possible service you can get, especially if you choose a reliable agent. Picking the right agent is critical as they not only put your needs before theirs, but can also help you in picking the right insurance product. Buying through an insurance agents also is the most convenient way of purchasing your insurance, because filling out all the necessary forms, payment, collection and delivery of road tax are all done through the agent.

When it comes to speed, not all insurance agents will be able to give you the road tax together with the insurance on the spot like Pos Malaysia or an insurance branch. However, some agents have their own Road Tax device from MyEG that allows them to issue the road tax. You can identify them by their MyEG sign at their office. Often times, the places are labeled as MyEG Kiosk.

SALES ADVICE: GOOD

Large agencies can represent more than one insurance company. These agents  can help you compare prices among insurance companies to find the cheapest. This is important, because with the motor detariffication starting July 1st, each insurance company will offer a different price for you. Read more about the Motor Detariffication in our article Malaysian Motor Detariffication.

CLAIMS SUPPORT: GOOD

Insurance agents play an important role during accidents. When you are involved in a road accident or if your car is stolen, a good insurance agent will be able to guide you what to do and what not to do. The agent will be able to advise what the insurance company will cover and pay for. A great agent will even fill out the claims form for you and collect all the necessary documents to file the claim with the insurance company.

Buying from car / motorcycle dealer without insurance staff

Here we take a look at car/ motorcycle dealers that are small and do not have a dedicated insurance team or department. Larger dealers may have full time insurance staff in their team who will handle all the insurance matters for them. If that is the case, then they have the same advantages and disadvantages as insurance agents.

You can find out if your car or motorcycle dealer has dedicated insurance staff if you search for your dealership in our insurance agent directory. If you can find your agent, you know that there is one dedicated  person in charge. You can also find out how the insurance staff’s ratings and reviews are. For the evaluation below, we look at car or motorcycle dealers that do not have dedicated insurance team.

PRICE: NEUTRAL

When you buy your car or motorcycle from the dealership, you most likely will have also bought the insurance at the same time. You will not get a 10% discount, because the dealers are insurance agents. This way they can earn extra money through insurance.

However, if the dealer or car manufacturer offers extra benefits for you, then it may be a good deal to renew your policy with the dealer. For example, Perodua offers their car owners a 10 year extra coverage if you renew with them.

SPEED & CONVENIENCE: BAD

We categorized dealers as BAD for speed and convenience because they are not knowledgeable in insurance and not interested to handle claims. Usually they will help you the first year to get your insurance, but subsequently the service offered deteriorates. In most cases, you will also need to walk into the dealership to make payment and collect the insurance as they do not offer delivery service. 

SALES ADVICE: BAD

Since we are only covering car/ motorcycle dealers that do not have a dedicate insurance person on site, therefore we categorized the SALES ADVICE as bad. Similar to SPEED & CONVENIENCE, the lack of a full-time professional insurance person helping you to make the right choices are important. To emphasize, not all car / motorcycle dealers provide BAD SALES ADVICE. There are dealerships out there that provide excellent service. But those are the exception. Most of them, we believe cannot compare to the professional sales advice of an insurance agent.

CLAIMS SUPPORT: BAD

Franchise dealers are mostly focused on selling cars or motorcycles.This makes sense, because when a sales person sells a car, he/she can make more money than handling an insurance question or claim. Also, handling an insurance claim can be very time consuming and complex. This is why we categorize dealerships with no insurance staff as BAD. 

Overview table of buying insurance/takaful motor insurance and road tax in Malaysia

WAY OF BUYING
INSURANCE

PRICE

SPEED & CONVENIENCE

SALES ADVICE

CLAIMS SUPPORT

MYEG

NEUTRAL
GOOD
BAD
BAD

Pos Malaysia

BAD
GOOD
NEUTRAL
BAD

DIRECT Insurance/
Takaful Branch

GOOD
BAD
BAD
NEUTRAL

ONLINE DIRECT

GOOD
BAD
NEUTRAL
NEUTRAL

Good Insurance/
Takaful Agent

NEUTRAL
GOOD
GOOD
GOOD

Car / Motorcycle Dealer
without insurance
staff

NEUTRAL
BAD
BAD
BAD