How to Avoid Under-Insuring Your Car (And Why It Matters)
Trying to save money on car insurance is normal, but under-insuring your vehicle can create serious financial gaps. While a lower insured value reduces your premium, it can weaken your insurance coverage when you need it most—especially during major claims.
What Is Under-Insuring?
Under-insuring happens when your insured value is lower than your car’s actual market value. This often occurs when drivers intentionally reduce the value to get cheaper premiums.
Why Under-Insuring Is Risky
While it saves money upfront, it creates risk later. If your car is stolen or badly damaged, your compensation may not reflect the true value of your vehicle.
This becomes especially important in:
Total loss situations
Theft claims
Major accident repairs
How to Set the Right Sum Insured
To avoid under-insuring, you should:
Use an insurance calculator to estimate realistic value
Compare insurer recommendations
Check market resale value
Don’t Forget Road Tax Planning
Your road tax renewal depends on having valid insurance. Using a road tax calculator helps you estimate costs and plan your total renewal budget.
Why Many Malaysians Still Under-Insure
Common reasons include:
Trying to save on premium
Lack of awareness
Not reviewing policies yearly
How Drive+ Helps You Avoid This Mistake
Drive+ allows you to maintain proper coverage without feeling the financial pressure.
Benefits include:
Road tax discounts
Free handling fees
Renewal savings via Atome/EPP
RM40 Bateriku voucher
This helps you avoid cutting corners on protection.
Renew here:
Frequently Asked Questions
What does under-insured mean?
It means your car’s insured value is lower than its actual value.
Is it illegal to under-insure?
No, but it is financially risky.
How do I calculate the correct value?
Use an insurance calculator and market comparisons.
Does under-insurance affect claims?
Yes, it can reduce your payout significantly.
Can I adjust my insured value anytime?
Usually during renewal.
Do I need insurance before road tax?
Yes, valid insurance is required.
Is cheaper insurance always better?
No, coverage matters more than price.
How often should I review my policy?
Annually.
