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Friday, 9 February 2018

Reasons Why You Shouldn’t Auto-renew Your Car Insurance

Car insurance is one of those financial responsibilities that you can’t escape if you want to drive in Malaysia. Auto insurance covers most of the things, starting from road accidents to natural acts like hail storm that may cause damage to your automobile. It would cost too much money if you pay from your pocket to fix these things. That’s why it is necessary to have car insurance if you own a car in Malaysia.



Some people go for auto renewal option when buying insurance as they don’t want to worry about writing checks every month, paying late, or have their policy lapse due to missed payments. However, you should not go for auto-renewal option and here is why.


You forget to cancel auto-renewal of your old car

For instance, if you have a car insurance policy that continuously renews every policy period. But it becomes major problem once you forget that you’re paying for it after you sell your car. After checking your bank statement you get to realize that you’re still paying the premium on your old car. Now suppose, you have bought insurance for your new car and auto insurance for your old is in auto-renewal, then you might end up paying premiums for both your new and old car. Yes, it can happen if you’re not careful!




Your premium amount can go up after renewal

One of the biggest misconceptions about car insurance is “loyalty” discounts. Though some insurers offer discounts to their loyal customers, but it’s not followed by all insurers in Malaysia. It may happen that your premiums go up, even if you have no penalty or met with an accident. If you take it for granted that your insurance company will continue the same premium over the next policy period, then you might end up paying more premiums.

You forget to transfer insurance to the new car owner

As per the law, you’re required to insure your cars in Malaysia. With lifestyle changes, you plan to sell your old car and buy a new one. When you sell a car, you must transfer the insurance to the new owner. If you forget to do this, you will have to pay premiums for the car that you don’t even own now.

It’s not that automatic renewal for your auto insurance policy is a bad option. It is useful if you are careful and keep a check on what you’re paying and when you are paying it. So before you decide to leave your car insurance on auto-renew, read all insurance documents carefully and keep a track on the premium payment date for better financial management.



Did you face any problem with automatic renewal of your car insurance? 
Share your experience with us in the comments section below!