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An expert’s advice: A veteran in the general insurance industry for over 28 years, Danny Ban is also a Registered Financial Planning lecturer. We are blessed to have him on a special interview series to share on the types of general insurance and what we ought to know before purchasing them. We will have 2 parts for this session of Expert’s Advice. Click here for Part 1.
In Part 2, we will be covering these topics:
- Should we buy travel insurance from the airline or insurance company?
- How is the claim process like for travel insurance?
- What are the type of motor insurance and additional coverage to get to protect our car?
- How is the claim process like for motor insurance?
Travel Insurance: Should I buy from the airline or insurance company?
Q: As far as I know, I can buy my travel insurance through airline company when I buy my flight tickets or through an insurance company. For convenience sake, I usually just buy from the airline company. What are the differences buying from the airline or insurance company?
A: The major differences would be firstly, the service and the insurance coverage. Now, for example, if you buy directly from the airline company, your insurance will only cover your travel from airport to airport. Whereas, if you buy from an insurance company through an agent, the travel insurance will insure your travel throughout the whole journey.
Travel Insurance: How is the claim process like?
Q: How is the claim process like for travel insurance?
A: If you buy your travel insurance from the company through an agent, you will be insured for a maximum days of 90 days. People who buy annual policy as they travel a lot often misunderstand that they will be covered for the whole year. However, travel insurance only insure a maximum of only 90 days for every travel.
Q: I’d like to ask a question, personally from me. Let’s say if I am admitted to the hospital while I was travelling in another country, how is the claim like? Do I have to pay first or is it a cashless admission?
A: Usually, travel insurance is based on reimbursement basis which means you will need to pay first for the initial admission. They will try their best to stabilize your condition and then send you back to your country by SOS. This SOS is a special plane arrangement, covered under the insurance. The reason being is because the medical cost for the certain country is very high. Hence, your insurance company may not pay you exactly the exchange rate. They will only pay out based on reasonable and customary charges after comparing the cost of treatment if treated locally. That is why it is better to send you back once your condition is stabilized.
Car Insurance: What are the types of available plans?
Q: Everyone will definitely own a car in Malaysia. What are the important car insurance that we need to buy to protect our car?
A: We refer car insurance as motor insurance in general insurance term. Motor insurance has 3 types of coverage. First type is the most comprehensive type of coverage, what we call the “First party” insurance, followed by the second type “Third party, fire and theft” and the last one is “Third party” insurance.
Q: What are the differences between these 3 types of coverage?
A: Comprehensive coverage, “First party” insurance will insure your car in events of any accident and damage, as well as the third party’s car. However, “Third party” insurance will only insure the third party’s car which means you will need to pay for the repairs of your own car.
Car Insurance: What are the additional coverage to get?
Q: What about the other benefits such as windscreen coverage or natural disaster. Is it necessary?
A: These are the extension of motor insurance. Firstly, the most common one would be windscreen as it reimburse you for the replacement of broken windscreen. Now, claiming windscreen has become more advanced whereby there are panel workshops to replace your windscreen on a cashless basis.
Q: Would you advise us to get these additional benefits?
A: Yes, it is quite common for people to buy windscreen coverage. However, flood coverage is not as common. This is because the premium for flood coverage is quite high, about 0.5% of the sum assured. For example, if your car is insured for 100K, the premium for flood coverage is about RM500. That’s why not many people will include into their motor insurance policy.
Car Insurance: How is the claim process like?
Q: That’s a very good information. What about the claim process? I’ve heard that some people take about 3-5 months just to claim their car insurance. Is that true?
A: For comprehensive policy, the claim process is quite easy because everything is online. Once an accident occur, you need to send your car to a panel workshop and the workshop will have an online system to submit the claim to the insurance company. An adjustor will be sent to assess the damage in a short time and your car can be repaired in a shorter time frame.
Host: Okay guys! That’s the end of our interview with our guest speaker, Danny today. We thank you all for your time and also, don’t forget to subscribe to our youtube channel and for more information, do go to our website FINPosts.com. Thank you Danny for your time and we hope to have you again on our next session! See you guys!!
Conclusion
Although it may be cheaper to get travel insurance from the airline when we purchase our tickets, the coverage merely only cover any unfortunate events when travelling from one airport to another. To ensure that our whole travel journey is covered, we must get our travel insurance from the insurance company. On the other hand, motor insurance is already compulsory to purchase in order to renew our road tax. However, do consider extending your coverage to the recommended windscreen and natural disaster coverage! Just for safety net!
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