Insurance coverage in Malaysia

Hi Kenjee,

The four main insurances that I used in Malaysia are:

- Medical Insurance
- Home Contents Insurance
- Property or Fire Insurance
- Car Insurance

Medical Insurance:

I used an insurance broker who over the years changed insurance company for me. The last one I used was Pacific Insurance and I covered my whole family. It basically only covered us if we were hospitalized along with all accommodation, operation, post consultation fees etc. Pre-existing conditions were excluded. The total premium for us, a couple with two kids, was around RM5,500 per year. The broker recommended Pacific because they pay fast.

I had a slipped disc operation once, turned up at Pantai Hospital, and presented my Pacific Insurance card and had everything covered by them, bill was around RM20,000.

Home Contents Insurance:

This is really cheap and recommend for everyone. Most insurance companies offer this at around the same rate. Typical rates begin at RM150 -175 per annum for coverage of RM30,000. I always got the RM50,000 coverage which was slightly more expensive. You'll need to provide proof of having more expensive items in your home.

Property or Fire Insurance:

If you live in a condo or apartment, the owner pays the fire insurance premium to the Management company. So if you are a tenant don't worry about it. Condominium management companies bill the owners once a year and the premium is compulsory and is pretty cheap, maybe only RM200 per annum depending on the insured value of the building. If you are an owner is worth checking with the management the insured value of the condominium building as that will directly affect how much you would receive should the building burn down. Many condominium Management Committees do not regularly get the building valuation checked in order to keep a low premium, sometimes for 10 years or more. So while the value of everyone's apartment goes up, the coverage may never change. So if you are an owner, get involved and attend the next Annual General Meeting and question the Management Committee and Management Company about the Insured Value of your apartment.

One very important thing to note, if you buy a property with a bank loan, the bank will always charge you a fire insurance premium to cover their investment. This premium may be up to ten times more expensive than the one paid to the condominium management and it will be deducted from your savings account no matter what you say or do. The only way to get that money refunded is to ask for a copy of the insurance policy (one sheet of paper) from the condominium management (given only when you have paid them the premium) and which must show the name of your bank and give it to the bank. Only then will the bank refund the money they have deducted. Some banks charge two years premium in one go, a hefty sum to suddenly find gone from your savings account. A lot of owners do not follow up on this and end up losing tens of thousands of ringgit over the years while the banks make a lot of money from naive customers.

Car Insurance:

If you buy a new car, the dealer will usually arrange everything for you, including financing, insurance and road tax. They continue to take care of you over the years and can send a runner to collect your payment and apply for everything at the relevant government department and then present you with the new insurance and road tax in a couple of days. I recommend fully comprehensive insurance and additional coverage for the windscreen.

Using an insurance broker is definitely cheaper than insuring through the car dealer. Insurance depends on several factors, but for my 2.5L SUV 4WD, I was paying about RM1,200 per annum with a 5 years no claim bonus through my insurance broker. If I had done the insurance through the dealer it would have cost almost double.

Regards,
Hansson