Avoiding Car Insurance Fraud in Malaysia

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What should you take note of when navigating the world of motor insurance here in Malaysia? What does car insurance fraud look like exactly? Today we dive into the darker side of the car insurance industry!

We’ve established the importance of having car insurance in Malaysia, and just how much money and time it can save you in the long run. The peace of mind granted is also immeasurable, not to mention the hefty fines you’d avoid having to pay, if you are driving with a valid car insurance.

It is inherently a good concept, but as always, humanity will always find a way to ruin positive things. There’s a dark side to the industry that manipulates the insurance system, and car insurance isn’t an exception. The law is always finding new ways to crack down on perpetrators who try to game the system, but it’s always good to keep yourself well-informed on the dangers, so that you’re aware of what to do when something goes wrong.

Here are some of the more common car insurance frauds and scams!

The Staged Accident

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You might have seen these on social media or even on the roads itself; cars or motorcycles brake checking or suddenly driving extremely slowly at exits or on the fast lane, hoping to catch road users unaware. 

They are banking on the general train of thought that when it comes to road traffic accidents, the vehicle that hits another vehicle from the back will always be liable. Once a collision happens, these culprits will turn aggressive and demand that the poor driver pay them up on the spot, rarely providing much room – if any – for discussion. It is a carefully curated hostile situation that aims to stress the victim out enough that they give in to their demands as a way to come to a quick resolution.

How do you prevent this?

First of all, good road habits should always be practised. Always ensure a safe driving distance from the car in front of you. You can use the three-second rule but make sure you adjust accordingly to the conditions of the roads and your vehicle, as these might affect your vehicle’s stopping distance. 

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Another thing you can do is to get yourself a dashcam. In the event where you are still unable to stop in time, you’ll have ample proof that this was a scam in action. The presence of a dashcam itself can also deter these criminals from targeting your vehicle!

Lastly, always remember to stay calm. Yes, it’s easier said than done in road traffic accidents, but try your best to shut out the pressure. Remember, this is their modus operandi. You are aware of what they’re trying to do, so don’t give in to them. Get the authorities involved, as that’s an easy way to scare them off. And most importantly, try your best to take down their personal and car plate details, if given the chance to do so safely.

Tow Truck Scam

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Similar to a staged accident, the tow truck scam works on people’s emotions in road incidents. These tow trucks are normally hidden from public sight, with the scammers patiently waiting for road users to enter zones that they might have littered with debris earlier, such as oil or nails. Once the unsuspecting drivers run over these road hazards and puncture their tyres, these scam artists will then “rescue” the affected vehicles and tow them to designated workshops.

The catch here is that they will end up charging exorbitant towing fees, and the workshops they bring you to –which are more likely than not in on the scam–  will probably do the same. 

How do you prevent this?

Again, we stress the point of not panicking in these scenarios. Car insurance is mandatory in Malaysia and most decent car insurance companies offer towing services as well as their own list of approved workshops that you can trust and rely on. Don’t let shady or random tow trucks that you did not call for hook up your vehicle. As always, double-check that the truck is actually sent from your insurance company. 

Fake Insurance Agent

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Another common car insurance fraud is the fake insurance agent. These sly foxes will try and talk their way into your wallets using their arsenal of weapons. These include fake badges, falsified documents, and low premium prices. You will end up signing up and paying for premiums that don’t exist. They may even cancel existing premiums on your behalf without your knowledge before disappearing into thin air.

How do you prevent this?

A scam that costs a billion ringgit annually should not be taken lightly, so always ensure that you do your due diligence! We cannot emphasise just how important it is for you to conduct your own background checks on every agent or company that you’ll eventually do business with. We understand that cost might be a factor when picking a premium, but if an offer is too good to be true, it most likely is!

We got you covered! 

Motorist was founded as a result of CEO Damian Sia’s brushes with the dark side of the automotive industry. We totally get that a car ownership journey can be intimidating enough even without the variety of scams mentioned above, so we’re here to help! 

Ignorance plays a huge role in making these scams successful, so ultimately, we hope that this article serves to keep you updated on the potential dangers in the world of car insurance rather than deter you from getting it. Do drop us a line if you’re looking to get yourself car insurance, or if you have any questions regarding car insurance! As always, stay safe Motorists!

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