Company-owned vehicles are common in Malaysian businesses. They are used for management travel, sales visits, and daily operations. Because these vehicles are business assets, they must be insured correctly. However, many business owners are still unclear about how company car insurance works.
This guide explains company car insurance in clear, simple terms. More importantly, it helps Malaysian businesses stay protected, compliant, and financially prepared.
What Is Company Car Insurance?
Company car insurance refers to motor insurance for vehicles registered under a company name. Importantly, this does not always mean commercial insurance.
In Malaysia, company-owned cars can still be private-use vehicles. For example, passenger cars used by directors or staff may be insured under private motor insurance, even though the car is registered under a company. In such cases, insurers usually require the company’s SSM registration number during policy issuance.
However, commercial vehicles are different. These include specific vehicle types such as:
- Vans
- Lorries
- Pick-up trucks used for logistics
- Vehicles transporting goods
These vehicles:
- Are registered under a company
- Are used strictly for business or logistics
- Cannot be used for private purposes
Because of this, commercial vehicles must be insured under commercial motor insurance.
Declaring the correct vehicle type and usage is critical. Otherwise, insurers may reject claims.
Company-Owned Cars vs Commercial Vehicles
Although both may be registered under a company, insurers treat them differently.
| Category | Company-Owned Passenger Car | Commercial Vehicle |
|---|---|---|
| Vehicle type | Sedan, SUV, MPV | Van, lorry, logistics vehicle |
| Usage | Office, management, mixed use | Goods or service delivery |
| Policy type | Private motor insurance | Commercial motor insurance |
| Private use allowed | Yes | No |
| Risk level | Moderate | Higher |
This distinction explains why correct declaration matters.
Why Company Car Insurance Differs From Personal Insurance
At first, company car insurance may seem similar to personal insurance. However, the risks are not the same.
For instance:
- Vehicles may be driven by multiple employees
- Mileage is usually higher
- Usage is more frequent
Because of this, insurers apply different underwriting rules. As a result, using the wrong policy type may lead to reduced payouts or rejected claims.
Types of Insurance for Company-Owned Vehicles
In Malaysia, insurers generally offer three levels of cover.
1. Third Party Cover
This is the minimum legal requirement. It covers:
- Injury or death of third parties
- Damage to third-party property
However, damage to the company vehicle is not covered.
2. Third Party, Fire and Theft
This option adds protection for:
- Fire damage
- Theft of the vehicle
Still, it does not cover accidental damage to the car.
3. Comprehensive Insurance
Most businesses choose this option. It covers:
- Third-party liabilities
- Damage to the insured vehicle
- Fire and theft
In addition, businesses can include add-ons for stronger protection.
Who Is Allowed to Drive a Company Car?
Driver eligibility is a common issue.
Most insurers allow:
- Company directors
- Full-time employees
- Authorised staff members
Some policies allow any authorised driver, while others require named drivers. Therefore, checking the policy wording is essential.
In all cases, drivers must:
- Hold a valid driving licence
- Be authorised by the company
- Use the vehicle within declared purposes
Otherwise, claims may be affected.
Declaring Vehicle Usage Correctly
Usage declaration directly affects coverage.
If a vehicle is used for:
- Sales visits
- Client meetings
- Site inspections
- Delivery work
This must be disclosed to the insurer.
For e-hailing or delivery services, additional requirements apply. These may include:
- PSV licence
- E-hailing endorsement
- Compliance with APAD regulations
Without proper declaration, insurers may reject claims.
Insurance Add-Ons Worth Considering
Although optional, add-ons improve real-world protection.
Common add-ons include:
- Special perils (flood, storm, landslide)
- Windscreen coverage
- All-driver endorsement
- Legal liability for passengers
Given Malaysia’s climate, flood coverage is especially important .
How Much Does Company Car Insurance Cost?
Premiums depend on several factors, including:
- Vehicle type and value
- Usage declaration
- Claims history
- Coverage level
As expected, premiums may be higher than personal insurance. However, the added protection supports business continuity.
Comparing Company Car Insurance Online
Today, businesses can compare insurance options digitally. This improves clarity and saves time.
Platforms like MetaFin allow companies to:
- Compare insurers
- Review coverage details
- Select suitable add-ons
Common Mistakes Businesses Should Avoid
Despite good intentions, mistakes still happen.
Common errors include:
- Using private insurance for commercial type vehicles
- Incorrect usage declaration
- Allowing unauthorised drivers
- Under-insuring vehicle value
These mistakes can result in rejected claims.
Final Thoughts: Protecting Your Business Vehicles Properly
Company car insurance is not just a legal requirement. It is a risk management tool.
When arranged correctly:
- Claims run smoother
- Business risks reduce
- Compliance is maintained
Before purchasing or renewing insurance, businesses should review vehicle usage, compare policies, and confirm declarations carefully.
Compliance Disclaimer
This article is for general informational purposes only. Coverage, terms, and conditions vary by insurer. Always refer to official policy documents or consult a licensed insurance intermediary before making decisions.