Did you know, that your driving behaviour can determine the price of  your car insurance? And that it no longer follows the predetermined tariff structure by Bank Negara Malaysia?

This change happened on the 1st of July 2017, where the detariffication or liberalisation of motor insurance took place for the whole of Malaysia. It is not something that happened overnight, so if you’re hearing this for the first time, you have a lot of catching up to do!

Scroll down or click here for easy to follow infographic if you’re not a fan of reading.

Prior to this change (and for the past 30 years or so), the price of car insurance followed a strict tariff structure provided by BNM. So irregardless of which insurance or takaful company you bought your insurance from, the price had always been pretty similar (with some minor differences due to other factors). Two main factors that determined the price of insurance were: vehicle engine and sum insured (either based on agreed or market value).

The Malaysian Guide to save on car insurance


Factors determining the price of car insurance today

Oh how things have changed! Today the price of your insurance is calculated based on all sorts of factors! For instance:

The vehicle itself – vehicle age, engine size, car model theft rate, safety features;

The driver/ car owner – years of driving experience, occupation, marital status, history of traffic violations and insurance claims etc.

Here at iBanding, we’ve touched on this subject extensively and many times over. So this time we shall look at this topic from a different angle – how your driving behaviour affects the price you pay for your car insurance.


Infographic: High Risk Driver vs. Low Risk Driver

Detailed explanation below.

Insurance Cost depends on your driving behaviour - Infographic

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How you drive = how much you pay for your insurance!

The price of your car insurance is largely determined by your risk profile as a driver and car owner. In a nutshell…

High risk driver = Higher car insurance price

Low risk driver = Lower car insurance price

1. The Careful Driver vs The Reckless Driver

The careful driver is always alert while on the road and is considerate. To the careful driver, his safety and the safety of his passengers as well as other road users is of utmost priority and importance.

With this attitude, he takes traffic regulations seriously. He has a very slim chance of getting involved in accidents. And when he does, it’s not his fault. Therefore he probably has never made any claim against his insurance policy.

The reckless driver is the complete opposite. They are inconsiderate, they road rage, are ill-tempered and they completely disregard the safety and well-being of other road users, or that of their own for that matter. Being Malaysians, like it or not, we all have seen them in action on the road.

Their careless and reckless behaviour often result in a higher number of road accidents to their names. This also leads to more number of motor insurance claims against their insurance policies.


2. The Traffic Observer vs The Traffic Violator

A driver who abides by traffic rules naturally is a careful driver. They take rules seriously and therefore may have very few traffic violations or none at all. They don’t drive above speed limit, don’t overtake at double-lines and they use their indicators when making a turn.

Needless to say, a traffic violator takes traffic rules lightly. They do no necessarily care about the safety of others or that of their own. Speeding, using mobile phone without a hand-free kit while driving, overtaking dangerous and recklessly and running red lights. Naturally, these drivers are no strangers to speeding tickets and other types of ‘samans’.


3. The Vigilant Driver vs The Incautious Driver

We are looking at this from the aspect of car safety and not from the aspect of driving behaviour. The vigilant driver always ensures that his car is safe. They install sufficient safety devices and features and make sure to always leave their cars at safe locations. But that is not all. They also ensure that they send their cars for checkups and maintenance on a regular basis.

The incautious drivers do the total opposite. They do not give any attention to the safety of their cars. They leave their cars in areas with high crime rates. They don’t install additional safety features and they don’t carry out regular maintenance to ensures the safety and security of their cars.

Your role as a car owner and driver

No doubt our responsibility as car owners and drivers is to ensure the safety of other road users as well as our own. However with liberalisation of motor detariffication, we may have just gained one more responsibility.

The price of our car insurance now depends on our behaviour as owner and driver. High or low, cheap or expensive, we can more or less decide it on our own.


If you are looking for an experienced and knowledgeable insurance agent to renew your motor insurance, you can easily find one on our directory.