Sum Insured

Ensure your vehicle is adequately insured.
  • New vehicle : sum insured = purchase price.
  • Other : sum insured = market value of vehicle when policy is bought.

Under insurance.
  • If sum insured is less than the market value, you are deemed as self-insuring the difference.
  • In the event of a loss, you will only be partially compensated.

Over insurance.
  • If sum insured is higher than market value, maximum compensation is the market value of the vehicle.
  • You cannot profit from a claim (principle of indemnity).

Determination of market value of your vehicle.
  • It is important to avoid under or over-insurance.
  • Find your car make, model and year to estimate what is the current market value.

Average clause.
  • It is applied when you suffer damage to your vehicle which is under-insured.
  • Your claim will be reduced proportionately by the uninsured portion.


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  • Takaful is an insurance concept which is grounded in Islamic Muamalat, observing the rules and regulations of Shariah. It is a concept that has been in practice for over 1,400 years.
  • Shariah is a complete Law and System to protect Islam and its adherents. Islamic Law covers many aspects of our lives and relationship, in personal, family, communal, as well as military, economics, and international matters.
  • In principle, the Takaful system is based on mutual cooperation, responsibility, assurance, protection and assistance between groups of participants. In other words, it is the provision of shared contributions to help those who are in need.
  • Takaful is defined as a mutual arrangement between parties in which they agree to provide material assistance to one another or a group, in time of a misfortune.
  • The Takaful scheme fulfills the spirit of Islamic Jurisprudence (Shariah) which is the combination of the concept of co-operation, protection, and responsibility and they are implemented together.


Takaful in Malaysia

  • Malaysia is a pioneer in the development and regulation of Takaful business.
  • There are currently 9 Takaful Operators in Malaysia and 2 Retakaful Operators.
  • Malaysia is also the first and only country to have industry-wide business intelligence on takaful business via the ISM Knowledge Management Services (ISM-KMS).
  • To support the rapid growth of the Takaful sector, Takaful members of ISM are able to benchmark their performance against both conventional as well as other Takaful operators in the industry using the Business Intelligence Reports available via the ISM-KMS.
  • Business Intelligence is a key enabler for Takaful members of ISM to manage the rapid growth of their business to ensure they remain competitive, efficient and stable in today’s global marketplace.


Understanding the Takaful Contract

  • The current Takaful practice uses a combination of two types of ‘Aqad (contract). These are the Tabarru' (donation) and Mudharabah (investment) contracts which are free from the elements of Riba (interest), Maisir (gambling) and Gharar (uncertainty).
  • In the Tabarru' contract, participants agree to donate or contribute to a fund with a sincere intention of helping each other to assume the monetary losses and misfortunes that may befall any of them.
  • In the Mudharabah contract, however, participants contribute to a fund that is managed by the Takaful company and share in the profits from such investment.

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