Key takeaways
- Under the Road Transport Act every vehicle on Malaysian roads must be insured at least against third-party risks, and you cannot renew roadtax without active motor insurance.
- Third party insurance pays for death, injury and property damage you cause to other people, but nothing towards your own car.
- TPFT adds cover if your own car catches fire or is stolen; only comprehensive pays to repair your car after an accident you caused.
- Flood is excluded by default; special perils is an add-on that Great Eastern General offers only with comprehensive and TPFT private car cover.
- Since 1 July 2017 insurers set their own comprehensive and TPFT premiums, while third party premiums still follow the Motor Tariff.
- Insuring your car more than 10% below its ISM market value means you bear part of every claim yourself.
What is third party insurance in Malaysia, and is it compulsory?
Yes, some motor insurance is compulsory. Under the Road Transport Act, every motor vehicle user must be insured against third-party risks, as Malay Mail explains. Bank Negara Malaysia lists four levels of motor cover, from the legal minimum up to comprehensive:
| Level | Also called | What it covers |
|---|---|---|
| Act cover | The legal minimum | Death or bodily injury to other people, as required by law |
| Third party | 3rd party | Your liability for injury, death and property damage you cause to others |
| Third party, fire and theft (TPFT) | "2nd party" in BNM's table | Third party, plus your own car if it is damaged by accidental fire or stolen |
| Comprehensive | "1st party" in BNM's table | All of the above, plus accident damage to your own car |
Third party means anyone other than you and your insurer: the other driver, a pedestrian, the owner of the wall or car you hit. Your own car is not a third party, so a third-party-only policy pays nothing towards its repair.
The law catches you in two places. First, you need active motor insurance before you can renew your roadtax (MyGOV). Second, JPJ said in May 2026 that having no valid insurance is an offence under section 90(1) of the Road Transport Act and, like expired roadtax, can mean a fine of up to RM2,000, up to three years in jail, or both (Borneo Post).
This guide is general information, not legal advice. Your own policy contract decides what is covered.
Renew roadtax & car insurance on WhatsApp
Third party vs TPFT vs comprehensive: what does each cover?
The three policies build on each other. Each level keeps everything in the level below and adds more cover for your own car:
| Cover | Third party | TPFT | Comprehensive |
|---|---|---|---|
| Death or injury of other people | Yes | Yes | Yes |
| Damage to other people's property (cars, walls, gates) | Yes | Yes | Yes |
| Your car: accidental fire | No | Yes | Yes |
| Your car: theft | No | Yes | Yes |
| Your car: accident damage | No | No | Yes |
| Flood, storm, landslide (special perils) | Not available | Add-on | Add-on |
| Current year NCD relief, waiver of compulsory excess | Not available | Not available | Add-on |
| Claim from your own insurer when not at fault (OD-KFK) | No | No | Yes |
| How the premium is set | Motor Tariff | Each insurer's own pricing since 1 July 2017 | Each insurer's own pricing since 1 July 2017 |
The add-on rows follow Great Eastern General's private car product disclosure sheet (valid as at 26 August 2025); other insurers' terms may differ. In that policy, the third-party limits are unlimited for death or injury to other people and RM3,000,000 for damage to their property.
What none of the three covers unless you add it
- Your own death or injury in a motor accident.
- Your liability to passengers in your own car (taxis and buses aside).
- Flood, storm, landslide and other acts of nature.
- Theft of accessories that were not factory fitted, unless you declared them.
- Depreciation, wear and tear, and mechanical or electrical breakdown.
That list comes from BNM's motor insurance FAQ. Passenger liability and flood cover can be added for an extra premium.
Who pays in a real accident? Seven situations compared
This is where the difference between the policies really shows. The table is a worked example based on these assumptions: a private car in Peninsular Malaysia, no add-ons unless stated, the police find one driver clearly at fault, and the limits in Great Eastern General's private car PDS.
| Situation (example) | Third party | TPFT | Comprehensive |
|---|---|---|---|
| You rear-end another car (your fault): their repairs | Paid, up to RM3 million for property damage | Paid | Paid |
| Same accident: repairs to your own car | Not paid | Not paid | Paid, less any excess; NCD falls to 0% at the next renewal |
| Another driver hits you (their fault) | Claim from their insurer (TPPD) | Claim from their insurer | Claim from their insurer, or from your own insurer under OD-KFK with your NCD kept |
| Your car catches fire in the porch | Not paid | Paid | Paid |
| Your car is stolen | Not paid | Paid | Paid |
| Your car is damaged in a flash flood | Not paid | Paid only with special perils | Paid only with special perils |
| You injure a pedestrian | Paid, no limit in this policy | Paid | Paid |
Two things surprise people. If you cause the accident, a third-party-only policy pays the other driver, but you pay for your own car in full. And if the other driver causes it, your level of cover matters less, because you claim from their insurer; comprehensive simply gives you the easier route of claiming from your own insurer under Own Damage Knock-for-Knock (OD-KFK) without losing your NCD.
Which is better, third party or comprehensive?
Neither is better for every car. I usually ask clients one question: if this car were written off tomorrow, could you replace it from savings without hardship? If not, comprehensive is usually worth it. Third party is the most basic and generally the cheapest cover (Malay Mail), and it mainly makes sense when the car's value is low.
| Your situation | Cover to consider | Why |
|---|---|---|
| New car, or still paying a car loan | Comprehensive | Repairs after an at-fault accident can be costly; also check what your hire purchase agreement requires |
| The car is worth a lot compared with your savings | Comprehensive | Only comprehensive pays for accident damage to your own car |
| Older car with a low market value you could replace from savings | TPFT or third party | You still meet the law and cover others; TPFT adds fire and theft |
| You park outdoors in a flood-prone area | Comprehensive or TPFT with special perils | Standard policies exclude flood |
| Several family members drive the car | Comprehensive with named drivers or the compulsory excess waiver | A RM400 compulsory excess applies to unnamed drivers, drivers under 21 and P or L licence holders |
Prices are not the same everywhere. Since 1 July 2017, insurers set their own premiums for comprehensive and TPFT based on their risk models, while third party cover is still priced under the Motor Tariff (Great Eastern on de-tariffication). Pricing can reflect the sum insured, engine capacity, the ages of the car and driver, safety features, where the car is kept and traffic offences (New Straits Times).
Your NCD matters on every level
Your No Claim Discount (NCD) is the discount you earn for claim-free years. PIAM gives this scale for private cars:
| Claim-free years | NCD on your premium |
|---|---|
| 1 year | 25% |
| 2 years | 30% |
| 3 years | 38.33% |
| 4 years | 45% |
| 5 years and above | 55% (maximum) |
NCD is given only when no claim has been made on or against your policy, and an at-fault own damage claim under comprehensive cover resets it to 0% at the next renewal. Comprehensive cover can add current year NCD relief for an extra premium. You can check your NCD for free; see my NCD guide.
Six mistakes that leave car owners paying out of pocket
- Insuring the car for too little. In Great Eastern General's PDS, if the sum insured is more than 10% below the ISM market value (or the panel adjuster's valuation), you bear the under-insured share of every loss yourself. See the example below.
- Assuming third party pays for your own car. When you are at fault, it never does.
- Skipping special perils before the monsoon. Flood, storm and landslide are excluded unless you add the extension. If your area floods, read my flood claim guide as well.
- Letting unnamed or new drivers use the car. A RM400 compulsory excess applies when the driver is not named, is under 21, or holds a P or L licence, unless you buy the waiver (comprehensive only).
- Forgetting betterment on older cars. For cars aged 5 years and above, you may pay part of the cost when new franchise parts replace old ones; BNM notes that non-franchise parts can avoid this.
- Letting the policy lapse. You are then driving uninsured, and you cannot renew roadtax until new cover starts.
Example: what under-insurance costs. All figures are assumptions and the sum is simplified; the actual settlement follows your policy terms.
| Item | Amount |
|---|---|
| ISM market value (assumed) | RM60,000 |
| Sum insured you chose (assumed) | RM45,000, which is 25% below market value |
| Approved repair bill (assumed) | RM12,000 |
| Share the insurer pays | 45,000 ÷ 60,000 = 75%, so RM9,000 |
| What you pay yourself | RM3,000, plus any excess |
How do you claim third party insurance in Malaysia?
"Claiming third party" usually means one of two things, depending on who was at fault:
- Make a police report and record the details of the other car, its driver and their insurer, with photos of the scene and the damage.
- If the other driver was at fault, claim your repair costs directly from their insurer as a Third Party Property Damage (TPPD) claim. With comprehensive cover you can instead claim from your own insurer under OD-KFK; BNM says your NCD is not affected as long as no third-party bodily injury claim and no public or government vehicle is involved.
- If you were at fault, tell your insurer quickly. The other party claims against your policy and your third party cover pays them. Your own repairs are paid only if you have comprehensive cover, and that own damage claim costs you your NCD.
- Ask about CART when you are not at fault. This is compensation for the time your car is under repair, paid by the other side's insurer and based on the repair days a registered adjuster recommends, not the days the car sits in the workshop.
PIAM adds that an OD-KFK claim is usually more convenient and faster than chasing the other party's insurer, and you do not need to appoint your own adjuster. Step-by-step details and documents are in my car accident claim guide.
Not sure which cover fits your car? Here is how I can help
I am a Great Eastern agent based in Seri Kembangan, and renewing car insurance and roadtax together is something I do for families in Kuala Lumpur and Selangor all year round. Before you renew, I look at your car's age and market value, who drives it and where you park, then explain plainly whether third party, TPFT or comprehensive makes sense and which add-ons are worth paying for.
I also check that the sum insured is not too low, that special perils is there if you need it, and that your NCD carries over. You get the answer on WhatsApp in Mandarin, English or Cantonese, and you decide in your own time: no hard selling.
See how renewal works on my car insurance and roadtax page.