Motor insurance gaps leave faultless car owners exposed to unfair financial losses
I WISH to highlight a major gap in Malaysia’s motor insurance framework that unfairly penalises car owners who are not at fault in accidents involving motorcycles or unlicensed drivers.
Currently, when a motorcycle causes damage, car owners are unable to claim repair costs from the motorcyclist’s insurer due to the low sum insured. This leaves car owners with little choice but to pay out of pocket or claim under their own policy, resulting in the loss of no-claim discount (NCD).
Even when the motorcyclist is clearly at fault, the financial burden falls on the car owner. The situation is further compounded when the motorcyclist sustains bodily injuries, as such claims are commonly directed to the car owner’s policy, again leading to the loss of NCD despite the car owner bearing no fault.
Similarly, in accidents involving unlicensed drivers, insurers often reject claims entirely, leaving innocent parties without recourse even when the vehicle driven by the unlicensed individual is covered by a valid insurance policy. As a result, the innocent party must bear the repair costs or claim under their own insurance and lose their NCD.
I respectfully seek Bank Negara Malaysia’s clarification and intervention on these issues. Why are OD-KFK (own damage knock-for-knock) protections not extended to motorcycle-related accidents? Can measures be introduced to preserve NCD of faultless drivers and ensure protection for victims when the at-fault party is unlicensed?
Responsible motorists who pay premiums and comply with the law should not be left vulnerable due to systemic loopholes.
I urge BNM to review these practices and consider regulatory reforms to ensure fairness and adequate consumer protection.
It is deeply concerning that this situation has persisted for so long, leaving thousands of car owners at a disadvantage, especially given the growing number of motorcycles on the road, including frequent illegal use of highway car lanes due to poor enforcement.
To my knowledge, the only recourse available is to pursue legal action to recover losses. However, such cases are difficult to win due to insurance policy clauses. Moreover, legal costs, lengthy proceedings and uncertainty over the at-fault party’s ability to pay serve as strong deterrents for affected car owners.
I hope this letter will prompt greater clarity and lead to meaningful improvements in the relevant regulations.
– Concerned Malaysian
