Under Insurance & Over Insurance

There are many important considerations when it comes to buying a vehicle. Insurance one of them.

Insured Value / Sum Insured

You need to protect your interest by purchasing a motor insurance to ensure that your vehicle is adequately insured so that you will receive the claim amount in the event of loss of damage. For a new vehicle, the insured value is the purchase price. For other vehicles, the insured value is the market value of the vehicle when you apply for insurance policy.

It is important to insure your vehicle for its exact amount to prevent the following circumtances:

Under-insurance : If you insure your vehicle at a lower sum than its market value, you are considered as self-insured for the difference, i.e: in the event of loss / damage, you will only be partially compensated (up to the proportion of insurance) by your insurance company.

Over-insurance : Should you insure your vehicle at a higher sum than its market value, the maximum compensation you will receive is market value of the vehicle as the policy owner cannot 'profit' from a motor vehicle claim. therefore, you would have paid higher premiums for nothing.