It’s always helping to understand and know the basics and most common terminologies of car insurance.

 

When comparing the best car insurance (or motorcycle insurance), it’s crucial for you to review the policies carefully before you sign on one of them. Most of us are not familiar with the legal terms stated in the policies. 

Being ignorant of what they meant or misunderstanding the terms could be problematic should accidents happen. Which makes it all the more reason for you to know the terminologies of car insurance in Malaysia.

 

Just like in Part 1, we’ll break the terminologies down. This time, we’ll go through terminologies starting with D, E, and F:

 

Common car insurance terminologies starting with ‘D’

 

Disability

If an accident causes you disability where you’re no longer able to work, you’ll usually receive compensation from your Personal Accident policy. This applies to grave injuries that leave you incapable of working. In this situation, you will receive a lump-sum compensation.

Meanwhile, for cases where you are absent from work temporarily because of an accident. Compensation in the form of a weekly payment will be paid for up to two years. 

Disability Benefit

This is an added provision for life insurance policies that waives the premium and at certain times a monthly payment income. This applies if you, the insured, become permanently and totally disabled. 

Deductible

Refers to the agreement made between the insurance company and the policyholder. It is where both parties will share the medical treatment costs. For instance, if the total medical bill is RM300 and the excess amount option is RM100, your insurer will pay the RM200 balance.  

Declaration

Refers to the part in an insurance policy that contains personal details and representations of the applicant. For example, past accidents or previous medical conditions.

Date of Issue

It is different from the insurance commencement date. The “Date of Issue” refers to the actual date when an insurance company finally issues the policy’s document.

Damages

Refers to the compensation for property damages or injuries sustained due to another party’s negligence or wrongful acts.

 

Common car insurance terminologies starting with ‘E’

 

Ex Gratia

The insurer pays the insured out of kindness or grace.

Exclusions

Anything excluded or not covered by an insurance policy 

Exceptions 

Also known as Exclusions in some cases. “Exceptions” are meant to limit the risk of an insurer. It can be found in the small print of policies.

Effective Date

The date when an insurance company is legally obligated to start the coverage. However, “Effective Date” is not the same as “Policy Date” and “Issue/Inception Date”.

Endorsements

The insurer or insured makes special plans or changes after the policy has already started.

Endowment

A combination of savings and protection where payment will be disbursed at a particular time if you sustain permanent and total disability or upon your demise.

Common car insurance terminologies starting with ‘F’

Fire and Theft

Comprehensive Car Insurance is usually not required for older cars. Therefore, an individual may extend a Third-Party policy for added premium in order to cover damage or loss caused by theft or fire (as well as attempted theft). However, idle or parked cars are only covered for theft and fire.

Free-Look Period

The period when policyholders can take their time to examine their newly issued insurance policy (normally 15 days). Once the period is over, the policyholder can make an exchange for a full refund of the premium by surrendering the policy without making claims.

Face Amount

In case a particular event that is insured happens, the insurer will make a lump-sum payment to the insured as promised.

Foreign Use (Cars)

In some countries, their car insurance can also be extended to cover the insured when they are driving in neighbouring countries. For example, some Singapore car insurance covers the insured while they are in Malaysia or Southern Thailand. Another example is when Hong Kong residents drive their vehicles in China, where they’re covered by their policies. 

Fleet Policies

For companies that own a few vehicles, all of them can be insured and covered under one policy, typically with a discount given.

 

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Always remember to read your policy thoroughly. Check whether every detail is correct, and make sure you truly understand all the terms and conditions mentioned in the contract. Don’t sign the policy until you’re certain that everything’s right and satisfactory. You may also ask for help from someone to review the policy and ask for their second opinion. 

*The content provided is for informational purposes only. FatBerry makes no representations as to the accuracy or completeness of any information on this site or found by following any link on this site. Should you require more information on our products, please refer to fatberry.com or contact us.

If you’re new to car insurance, you may be overwhelmed by the legalities of it all. Many of us don’t know some of the term meanings stated in a car insurance policy. We’ll explain a few basic and most common car insurance terminologies to know.

 

It can be tedious to find, compare and buy car insurance, particularly if you’re the fussy kind (which is good because we’re talking about saving yourself and others). In between all of that, you’ll also have to review the policies carefully before you sign on the dotted line.

For most of us, we may not be familiar with the legal terms stated in the policies. Not knowing what they meant or misunderstanding what they meant could cause you some problems in the future, which is why you need to know all there is to know about the terminologies of car insurance in Malaysia.

Since there are so many car insurance terminologies that you must know, we’ll break it down into a few parts. In this Part 1, we’ll list the terms that start with A to C:

 

Common car insurance terminologies starting with ‘A.’

 

Act Of God

This refers to whatever occurrences that happen naturally beyond human control, for example, floods or landslides…

Acceptance

Both parties involved agree to the terms of an insurance contract, where it is binding.

Accident

An unintended or unforeseen occurrence or event.

Accidental Bodily Injury

The insured’s body has injuries due to an accident.

Additional Perils 

Add-ons made for basic insurance policies. They are sometimes known as Special Perils or Fire policies, where they cover perils such as explosion, lightning, and fire; or losses due to flood and storm.

Age Limits

Insurance companies won’t accept policy renewals or applications by those who are under the age limit or over the age limit.

Agents

An individual who sells and provides services related to insurance policies on behalf of insurance providers.

Annual Limit

For a one-year policy, the Annual Limit refers to the maximum amount paid for your claims settlement. Your premium will be higher the higher the annual limit.

Assured

An individual who has been insured against loss.

 

Common car insurance terminologies starting with ‘B.’

 

Benefit Policy

A contract that pays the insured a sum of money in a specific occurrence, whether or not the person insured faces financial loss.

Beneficiary

An individual who receives the payout from the contract made if the insured dies.

Beneficiary, Contingent

When the beneficiary dies before the insured, the death benefit will be designated to individual(s). 

Beneficiary, Irrevocable

A beneficiary that the insured cannot change.

Beneficiary, Primary

An individual or individuals who will receive the benefits.

Betterment

If some wrecked parts need to be replaced with new ones when you send your damaged vehicle for repair, a portion of the costs will be covered by your insurer. The difference needs to be paid by you based on the standard betterment scale, ranging from 0% to 40%.

Bodily Injury Liability

 A legal liability arises when someone faces an injury or dies.

Breach of Contract

The insured fails to comply with his/her insurance policy’s terms and conditions. 

Broker

An individual who represents the insured by servicing and arranging insurance policies on the latter’s behalf. The broker earns commissions from the insurance company.

 

Common car insurance terminologies starting with ‘C.’

 

Claim

An individual makes a claim to an insurance company for a loss that the policy covers.

Conditions

The policy owner (the insured) needs to comply with the policy’s terms before his/her insurers pay for the claim made.

Contract of Indemnity

This type of property insurance restores the insured’s financial condition to how it was before when he/she suffers a loss or misfortune. However, it is not considered a Contract of Indemnity for Personal Accident insurance if the insurer makes a lump sum payment to the insured, which has been pre-agreed.

Contribution

In the case where an individual holds more than two insurance policies (which are contracts of indemnity) that are similar in terms of coverage for the same perils, the law will prevent the insured from recovering his/her loss under the policies so he/she could profit from it. 

Coordination of Benefits

When more than one policy covers an insured, the primary carrier will be determined by a group policy provision. This is to ensure that the insured will not receive overpayments in claims.

 

You must read your policy thoroughly. Check whether every detail is correct, and make sure you truly understand all the terms and conditions mentioned in the contract. Don’t sign the policy until you’re confident that everything’s right and satisfactory. You may also ask for help from someone to review the policy and ask for their second opinion. Stay tuned for the second part of this blog post!

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*The content provided is for informational purposes only. FatBerry makes no representations as to the accuracy or completeness of any information on this site or found by following any link on this site. Should you require more information on our products, please refer to fatberry.com or contact us.