7th September 2026 - 6 min read
Two drivers can buy the same car, at the same price, from the same showroom, and still pay noticeably different amounts for their car insurance/takaful every year. The difference has nothing to do with the car’s price tag. It comes down to a handful of factors that insurers/takaful operators use to work out how likely you are to make a claim, and most drivers only notice when the renewal figure looks too high.
Understanding these factors puts you in a better position at every renewal. Instead of accepting whatever figure appears on your renewal notice, you can check whether your premium/contribution reflects your situation and know exactly where you stand before signing off on it.
The sum covered is the amount your insurer/takaful operator agrees to pay out if your car is stolen or damaged beyond repair. For most policies/certificates, it tracks your car’s current market value, not the price you paid for it. For instance, a car bought for RM80,000 three years ago might only be worth RM60,000 today, so its sum covered (and the premium/contribution calculated from it) usually decreases with it.
When protecting your vehicle under a comprehensive policy/certificate, the sum insured/covered is determined on either a market value or agreed value basis. Market value refers to what your car is worth at the time of loss. Since vehicles depreciate over time, this value may be lower than the amount recorded when the policy/certificate first began.
Agreed value, meanwhile, is the amount agreed upon by you and your insurer/takaful operator at the start of the policy/certificate. It is usually determined based on factors such as the car’s make, model, year of manufacture, and current market value. If the car is stolen or damaged beyond repair, the agreed amount stated in the policy/certificate will generally be paid, subject to the policy/certificate terms, even if the car’s market value changes during the coverage period.
This is one reason two identical cars can carry different premiums/contributions. A higher sum insured/covered generally comes with a higher premium/contribution, while a lower sum insured/covered may reduce the premium/contribution but could potentially leave the owner with insufficient compensation following a loss. Protecting the car at an appropriate value helps avoid paying more than necessary while ensuring the payout remains adequate.
The No Claim Discount (NCD) reduces your premium/contribution more than any other single factor. For every year you go without making a claim, you earn a discount on your basic premium/contribution, following a scale set for the industry. It starts at 25% after your first claim-free year and climbs to a maximum of 55% after five consecutive claim-free years.
If you sell your old car and buy a new one, your NCD transfers over, and it follows you if you switch insurers/takaful operators too. Make a claim for your own damage, though, and it resets to zero, which is why some drivers pay for minor repairs themselves rather than make claims from their policies/certificates.
Since 2017, insurers/takaful operators in Malaysia have been allowed to set their own prices for comprehensive policies/certificates instead of following one fixed rate for everyone, which gives them more room to price each driver based on individual risk. A younger driver typically pays more than an experienced one, because statistically, younger drivers claim more often. A record of past claims pushes the premium/contribution up in the same way, while a long clean record works in your favour.
The car model plays a part too. Some models are stolen more often than others, and some cost far more to repair because of expensive parts or specialised workshops. Engine capacity feeds into the basic premium/contribution as well, so a 2.0L sedan starts from a higher base than a 1.0L hatchback even before any personal factors apply.
Location plays a part as well as a car registered and parked in a dense urban area with higher theft and accident rates is priced differently from a car registered in a quieter town.
A worked example shows how quickly these factors add up. Take two owners of the same RM60,000 car with an identical basic premium/contribution of RM1,800 a year. The first is a 23-year-old first-time car owner with no NCD. The second is a 45-year-old who has driven claim-free for over five years and sits at the maximum 55% NCD.
| Driver Profile | NCD | Premium/Contribution Payable |
| 23-year-old, first policy/certificate | 0% | RM1,800 |
| 45-year-old, five claim-free years | 55% | RM810 |
*Figures are illustrative and exclude add-ons, loadings, service tax, and stamp duty. Actual premiums/contributions vary by insurers/takaful operators and profile.
Same car, same basic premium/contribution, and a difference of RM990 a year before any other adjustments. If the younger driver also attracts a loading for age or claims history, the difference grows further. Spread over the five years it takes to build a full NCD, the total saving runs into thousands of ringgit.
Some of these factors are within your control. Your NCD grows as long as you avoid claims, so weighing up whether a small repair is worth claiming for protects your discount. Checking that your sum covered matches your car’s current market value stops you from over-subscribing at renewal. Your choice of add-ons, such as windscreen coverage, special perils coverage for floods, or personal accident coverage, also shapes the final figure, so pick the ones that match your lifestyle and driving style instead of taking every option offered.
Others are fixed, at least in the short term. You cannot change your age, and your car’s model, engine capacity, and registered location are settled the day you purchase it. What you can do is manage the parts you control and compare quotes so you know your fixed factors are being priced fairly.
Zurich Malaysia’s Z-Driver is one example of how these factors translate into an actual quote. The premium/contribution is based on your risk factors, such as cautious drivers, women drivers, or SUV owners, and a further discount of up to 20% if you opt for a voluntary excess, which means agreeing to self-pay a set amount in the event of a claim. Add-ons such as water damage coverage is available from RM10 a year and personal accident coverage from RM15 a year, letting you shape the protection around your needs.
Z-Driver is available as a conventional plan and Z-Driver Takaful as a takaful plan, where your contributions work the same way in reflecting your NCD and risk profile. Both policies/certificates can be subscribed online through Zurich Malaysia’s website, so you can see how your own profile shapes your pricing within minutes rather than waiting for a renewal notice.
Get a Z-Driver Insurance or Z-Driver Takaful quote online to see exactly how your NCD, your car, and your driving profile come together.
As a creative content writer, Eloise has covered finance, business, lifestyle topics, and even moonlights as a singer-songwriter outside of RinggitPlus. Her current interests are learning the best ways to optimise spending and credit card hacks to gain more airline miles.
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