Thursday, 25 August 2011

Car Insurance - No Claims Bonus

As I'm just going through the process of ordering a car here (though which one is proving difficult to decide) it's worth me pointing out that new cars here will pretty much always be quoted with a price including insurance by a dealer, whether you buy a CKD (completely knocked down) under the MM2H tax free incentive or not. If you buy under the MM2H scheme it is worth bearing in mind that your insurance must be based on the retail price of the car without the tax taken off under the incentive. The current retail purchase price of a Honda CRV for instance is approximately RM 145K. This is the figure that the vehicle will be insured for and not the RM 105K purchase price on the MM2H scheme. As a rough guide I've quoted below the insurance prices (without any no claims bonus) provided by Honda for several vehicles spanning a range of engine sizes and value (the figure in brackets after each vehicle is the road tax cost per year):
  • City S: RM 2,393 (90)
  • Civic 1.8 S: RM 3,147 (279)
  • Accord 2.0 VTi: 3,849 (378)
  • Accord 2.4 VTi-L: RM 4,656 (734)
  • CRV: RM 4,031 (438)

The engine in a City is a 1,500 cc and, as you can see, in keeping with many other countries, the cost of both insurance and road tax rises dramatically as the power, engine size and carbon foot-print of the vehicle goes up. The road tax variance between the 1.5L and 2.4L is very marked indeed and it is good to see the perhaps more rigorous approach taken to encouraging 'going green' here compared to the somewhat minimal cost differences in some countries. Anyway, before I get too much 'off topic', the primary purpose of this post is to flag up an insurance issue.

You can take your insurance through the dealer or even look to provide your own (I am likely to go with Kurnia) and the only way that you can reduce the cost from the outset as an overseas buyer (MM2H or otherwise), over and above choosing the less powerful and expensive cars (and in Penang, with tight parking in places and some heavy traffic in Georgetown at times, I'm starting to favour the smaller is better approach), is to provide proof of a previously accrued 'No Claims Bonus' (NCB) with your insurers in your home country. Whether and to what extent this will be accepted will depend on both your choice of insurer here in Malaysia (Penang in my case) and your home country. I came from the UK originally and both Kurnia and Toyota are happy to accept my proof of NCB. You will however need to provide an original letter from your insurance company and this is one of the things that may be good to add to your 'To Do' list before you come to Malaysia on a more permanent basis. This will save the hassle and cost of getting it posted here, which some companies may be reluctant to do.

I am grateful to Toyota Malaysia for providing me with the details that they require to be included in any letter for the insurers they use to consider applying the NCB, detail which was accepted by Kurnia and which would doubtless mirror the requirement from other providers:
  • Your name
  • Your address (in your home country)
  • Policy number
  • Period of coverage
  • Type of coverage (e.g. Fully Comprehensive)
  • Vehicle Registration (where relevant)
  • Final percentage of No Claims Bonus earned and applied to your policy
  • Total Years of No Claims

The detail companies can provide you with will vary but clearly the closer you can get to providing all of the above, the more success you are likely to have in reducing you premium costs here. I merely provided all of the above detail to my previous insurers who covered all the points.

This is certainly one of the things worth doing as, in my case, I qualify for 55% NCB here, which reduces the cost of insurance on even a Honda City or Toyota Vios considerably, more so if opting for something like a 2.4 Litre!!!

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